Full Judgment Text
$~1 (original side)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P.(COMM) 433/2020 & I.A. 4775/2020, I.A. 4776/2020
GMR POCHANPALLI EXPRESSWAY LTD. ..... Petitioner
Through: Mr. Manoj K. Singh, Mr. Vijay
K. Singh and Mr. Vishal Gera,
Advs.
versus
NATIONAL HIGHWAY AUTHORITY
OF INDIA .... Respondent
Through: Mr. Ankur Mittal, Mr. Abhay
Gupta and Ms. Aishwarya
Pandey, Advs.
CORAM
HON'BLE MR. JUSTICE C. HARI SHANKAR
ORDER (ORAL)
% 01.07.2020
(video-conferencing)
O.M.P.(COMM) 433/2020 & I.A. 4775/2020 (for stay)
1. This petition, under Section 34 of the Arbitration &
Conciliation Act, 1996 (hereinafter referred to as “the 1996 Act”)
th
challenges an award, dated 14 January, 2020, passed by the learned
Arbitral Tribunal, to the extent of paras 160(I) and 160(VI) thereof.
Consequently, the petition prays that claim numbers (i), (iii) and (iv),
as preferred by the petitioner, before the learned Tribunal, be allowed.
2. These proceedings emanate from a Concession Agreement,
st
dated 31 March, 2006, between the applicant and the respondent,
O.M.P. (COMM.) 433/2020 Page 1 of 20
whereby the applicant was awarded a contract for maintenance of the
National Highway Project concerning 4-laning of the Adloor
Yellareddy-Gundla Pochanpali section of NH-7 spanning a total
distance of 412 kms. The contract was on Build Operate and Transfer
th
(BOT) Annuity basis. The appointed date was stipulated as 26
September, 2006, and the construction period was of 30 months.
Provisional completion certificate was issued, to the applicant, by the
th
respondent, on 26 March, 2009 and final completion certificate was
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issued on 25 July, 2009.
3. According to the terms of the Concession Agreement, annuity
of ₹ 54.18 crores was payable to the petitioner, every 6 months, for the
th th
period from 24 September, 2009 to 25 September, 2026, as per
Schedule G thereto.
4. The agreement also stipulated that a Pavement Riding Quality
Test would be conducted every year jointly by the parties, under the
supervision of an Independent Consultant. It appears that the
conducting of the aforesaid riding quality test was to assess the surface
roughness index of the highway. I am informed that the upper coat of
the road is also referred, alternatively as the “pavement”. Admittedly,
the surface roughness index of the pavement has, throughout, been
less than 2000 mm/km.
5. At this point, it would be appropriate to refer to certain clauses
of the Concession Agreement, to which Mr. Manoj Kumar Singh,
learned Counsel for the petitioner, drew my attention:
O.M.P. (COMM.) 433/2020 Page 2 of 20
(i) Clause 1.2 of the Concession Agreement sets out certain
general principles for interpretation thereof, and sub-clause (k)
thereof reads thus:
“(k) the Schedules to this Agreement form an
integral part of this Agreement and will be in full force
and effect as though they were expressly set out in the
body of this Agreement;
(ii) Clause 1.4.2 of the Agreement, specifically sub-clause
(iv) thereof, reads thus :
“ 1.4.2 In case of ambiguities or discrepancies within
this Agreement the following shall apply:
xxx
(iv) Between the written description on the
Drawings ,and the Specifications and Standards,
the latter shall prevail;”
(iii) Chapter II of the Agreement sets out the scope of the
project, and Clause 2.1 thereof reads thus :
“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, financing. procurement, construction,
completion, operation and maintenance of the Project
Highway as described in Schedule „B‟ and Schedule
„C‟ of this Agreement. It shall Include (brief
description of the project in accordance with the
Specifications and Standards set forth in Schedule ~D'
and operation and maintenance thereof in accordance
with Schedule 'L' . It shall also include the performance
and fulfilment of other obligations by the
Concessionaire under this Agreement.
O.M.P. (COMM.) 433/2020 Page 3 of 20
The Concessionaire shall undertake its obligations at its
own cost and risk.”
(iv) Chapter XIX of the Agreement deals with “Monitoring
and Supervision During Operation”. Clause 19.2, thereunder,
commences thus :
“19.2 The Independent Consultant shall review the
Maintenance Reports and inspect the Project Highway
at least once a month during the Operations Period and
make out an Inspection Report of such inspection (the
“O&M Inspection Report")...
(v) Appointment of the Independent Consultant was
contemplated by Chapter XX of the Agreement which is titled
“Independent Consultant”. Clause 20.1, thereunder, reads thus:
“20.1 NHAI shall appoint a consulting engineering
firm or body corporate in accordance with the selection
process set forth in Schedule „N‟ to be the Independent
Consultant to undertake and perform the duties, work,
services and activities set forth in Schedule 'O'. In
addition NHAI, at any time during the Concession
Period at its own cost, may appoint a Technical
Auditor in the nature of a Proof Consultant to review
the work carried out 'by' the Independent-Consultant.”
(vi) Schedule B to the Agreement is titled “the Project”. It
has various clauses, of which, Clause 1 titled, “General”,
contains the following recital:
“The Concessionaire shall also do the value addition
for improving safety by providing safety items and also
provide road furniture for this BOT package, after
handing over to him to bring it to specified standard of
Project Highway as per specifications and standards
mentioned in Schedule D and Schedule L .”
O.M.P. (COMM.) 433/2020 Page 4 of 20
(vii) Schedule D to the Agreement is titled “Specifications and
Standards”. Clause 4, thereunder, deals with “Safety During
Project Execution, Operation and Maintenance”. Sub-clause 4.2
thereunder reads thus:
“4.2 The Concessionaire shall also ensure complete
safety of the Road Users during the construction work
of various nature spelt out in Schedule L .”
(viii) Schedule L to the agreement is titled “Operation and
Maintenance Requirements”. As is apparent from Clause 4.2 of
Schedule D supra , the safety of the road has to be maintained in
accordance with this schedule.
(ix) Clause 1 in Schedule L stipulates, inter alia, that
Schedule L “elaborates the operation and maintenance
Requirements of the Concession and is to be read together with
the Concession Agreement for this purpose”.
(x) Clause 4.3 in Schedule L deals with “Periodic
Maintenance of Pavement” and Clause 4.3.1 deals with
“Pavement Riding Quality”. These clauses, which are
fundamental to the controversy in issue, may be reproduced
thus:
“4.3. Periodic Maintenance of Pavement
The framework of activities relating to pavement
maintenance and rehabilitation in respect of flexible
and rigid pavement are given in the flow charts in
Appendix 3.1 and Appendix 3.2 respectively. The
Concessionaire shall set forth in the Operations and
Maintenance Manual the detailed procedures to be
followed under each of these activities, and also choose
O.M.P. (COMM.) 433/2020 Page 5 of 20
the operational and performance criteria from the
performance standards set forth in this Schedule.
4.3.1. Pavement Riding Quality
The riding quality of the pavement shall be ensured by
satisfying the minimum requirements given herein
under.
i) Surface roughness of the Project Highway on
completion of construction shall be 2000 mm/km as
measured by vehicle mounted Bump Integrator.
ii) Surface roughness shall not exceed 3000
mm/km during the service life of pavement at any time.
A renewal coat of bituminous concrete shall be laid
every 5 years after initial construction or where the
roughness value reaches 3000 mm/km whichever is
earlier to bring it to the initial value of 2000 mm/km.”
6. The controversy in issue, in the present petition, centres
essentially around Clause 4.3.1 (ii), reproduced hereinabove,
specifically on the second sentence thereof, which stipulates that “a
renewal coat of bituminous concrete shall be laid every 5 years after
initial construction or where the roughness value reaches 3000
mm/km whichever is earlier to bring it to the initial value of 2000
mm/km ”. The learned Tribunal has interpreted this clause to mean
that, even if the roughness value of the pavement is below 2000
mm/km, a renewal coat of bituminous concrete necessarily has to be
laid every 5 years. The reasoning, as contained in the impugned
award, specifically, in this regard, reads thus :
“79. On a conjoint reading of Clause 4.3.1 of
Schedule L of the CA and Appendix 3.1, we do not
find any substance in the contention of the Claimant
that the requirement of laying down of renewal coat
O.M.P. (COMM.) 433/2020 Page 6 of 20
after every five years is qualified by the words "to
bring it to the initial value of 2000 mm/km". The words
"to bring it to the initial value of 2000 mm/km" are
used in respect of the phrase “where the roughness
value reaches 3000 mm/km" meaning thereby that if
the renewal coat is required to be laid down because
the roughness value has reached 3000 mm/km, the
same is laid down to bring the surface roughness value
to 2000 mm/km. The words "to bring it to the initial
value of 2000 mm/km" are not used with respect to the
words "every 5 years after initial construction". The
maintenance required to be done was in the nature of a
regular periodic maintenance activity. It was required
to be done every five years and did not depend upon
the surface roughness value. Clause 4.3.1 cannot be
interpreted to convey that the renewal coat was
required to be done only when the surface roughness
value was more than 2000 mm/km.”
7. Consequent on the aforesaid interpretation, the learned Arbitral
Tribunal has, in the impugned award, directed the petitioner to
st
commence the renewal work for the second cycle by 1 April, 2020
and to complete it by the end of 2020, and to complete the renewal
st
work for the third cycle by 1 April, 2025.
8. Fundamentally, the petitioner questions the correctness of this
direction on the ground that, if the roughness of the pavement is found
to be less than 2000 mm/km, there is no requirement for renewal work
to be carried out thereon, even as per the terms of the Concession
Agreement. The manner in which the learned Tribunal has chosen to
interpret Clause 4.3.1, Mr. Manoj Kumar Singh would strenuously
contend, is not sustainable in law, as there are no commas in the said
clause, and it is not possible to read the requirement of bringing the
roughness index to 2000 mm/km only with the second part of the sub-
O.M.P. (COMM.) 433/2020 Page 7 of 20
clause. Fundamentally, Mr. Singh argues that, if the roughness index
is less than 2000 mm/km, there could be no question of requiring the
petitioner to carry out any renewal work on the road, and that
requiring the petitioner to do so would go against the terms of the
contract itself and the intention thereof, as manifested from the
aforementioned clauses.
9. Mr. Manoj Singh also draws my attention, in this context, to a
flow chart, forming part of Schedule L to the Concession Agreement,
which merits reproduction, thus :
Compare with
operation/performa
nce Criteria
District wise
Data analysis
Daily and
periodic
inspection
Routine
Maintenance
Pavement
condition
survey
Do nothing Carry out
required repairs
Diagnostic
Investigation
Do nothing
Compare with
operation/performa
nce Criteria
Roughness
Survey
Periodic
Periodic
Maintenance
Inspection
Renewal
Do nothing
Compare with
operation criteria
BBD
Measurement
Overlay
Mr. Manoj Singh contends, by reference to the lower half of the afore-
extracted flow chart, that, be it a case of periodic maintenance or
periodic inspection, where the roughness index of the surface of the
pavement compares favourably with the operation/performance
criteria, the petitioner is required to do nothing, and it would be
required to renew the surface only if the roughness index was
discrepant vis-a-vis the optimum operation/performance criteria which
O.M.P. (COMM.) 433/2020 Page 8 of 20
is 2000 mm/km. To buttress this submission, Mr. Manoj Singh has
also drawn my attention to the “Equivalent Rating Conditions”, also
forming part of Schedule L, which indicates, that where the road is in
“good condition”, no repairs are needed. In conjunction therewith,
Mr. Singh refers to a roughness survey relating to the test result of the
pavement riding quality test, conducted in January, 2020, jointly by
the petitioner and the respondent with the representative of the
independent consultant, as communicated to the appellant vide letter
nd
dated 2 March, 2020, by the respondent. He points out that, in the
said report, it is specifically stated that “as per the obtained values at
site, the road condition is good”. He also draws my attention to the
following recital, which forms part of the said report:
| Type of<br>Surface | Condition for Road Surface | ||
|---|---|---|---|
| Good | Average | Poor | |
| Bituminous<br>Concrete | <2000 | 2000-3000 | >3000 |
10. Mr. Singh also questions the manner in which the learned
Tribunal has sought to rely on clause 2.6.1 of the Concession
Agreement, which reads thus :
“ 2.6. Operation and Maintenance Stage
2.6.1. This is applicable for the entire Operations Period for
the Project Highway during the entire Concession Period.
Various important activities to be carried out during this stage
are:
a) Regular periodic maintenance activities:
O.M.P. (COMM.) 433/2020 Page 9 of 20
i) Renewal of the wearing surface of the
road pavement once every 5 years;
ii) Strengthening course to be provided on
'as required' basis.
b) Maintenance activities arising out of the specific
need(s) on account of the site conditions are:
i. Strengthening course required on account
of the Benkelman Beam Deflection (B.B.D),
values in excess of the prescribed criteria
obtained during regular testing as per the
Concession Agreement requirement;
ii. Wearing course required on account of
the IRI values higher than the prescribed criteria
obtained during regular testing as per the
Concession Agreement requirement;
iii. Localized repairs in short lengths less
than 500 m on account of pot holes. cracking,
subsidence in isolated spots or in scattered
areas.”
Mr. Singh submits that, while relying on the reference, in clause
2.6.1(a), to the requirement of renewal of the wearing surface of the
road pavement once every 5 years, the learned Tribunal has
overlooked sub-clause (ii) of clause 2.6.1(b), which stipulates that
wearing course was required if the IRI values were higher than the
prescribed criteria obtained during regular testing as required by the
Concession Agreement. The testing, during the Concession
Agreement, never having found the IRI values of the pavement to be
higher than the prescribed criteria, Mr. Singh would submit that no
requirement of renewal of the wearing surface of the road existed.
O.M.P. (COMM.) 433/2020 Page 10 of 20
11. Mr. Singh has also drawn my attention to various decisions,
1
notably NHAI v. Progressive MVR (JV) and NABHA Power Limited
2
v. Punjab State Power Corporation Limited . He has invited my
1
attention to para 15 of NHAI v. Progressive MVR (JV) , which reads
thus :
“15. Thus, the main reason because of which the NHAI lost
in those proceedings was that two possible interpretations
could be given to the Clause in question and, therefore, the
recourse taken by the Arbitral Tribunal by adopting one
particular interpretation was not required to be interfered with.
SLP against that was dismissed. In a situation like this, this
Court would not have undertaken further exercise in the
matter. However, another Arbitral Tribunal in the case of M/s.
Ssangyong Engineering and Construction Co. Ltd. has
accepted the other view, which goes in favour of the NHAI. It
leads to an anomalous situation. The NHAI has entered into
multiple contracts with different parties containing the same
clauses of price variation. Once we find that Arbitral
Tribunals are taking different views, and the view taken in
favour of the NHAI is also one of the possible interpretations,
the effect thereof would be to uphold both kinds of awards
even when they are conflicting in nature in respect of the same
contractual provision. It may not be appropriate to
countenance such a situation which needs to be remedied.
Therefore, under this peculiar situation, we deem it proper to
go into the exercise of interpreting the said Clause so that
there is a uniformity in the approach of the Arbitral Tribunals
dealing with this particular dispute and a sense of certainty is
attached in the outcomes. ”
(Emphasis supplied)
Mr. Singh submits that, in another arbitration for maintenance of a
highway between NHAI and Nirmal BOT Ltd., the learned Arbitral
Tribunal, in that case was concerned with the interpretation of an
identical clause, and arrived at the conclusion that, as the roughness of
1
(2018) 14 SCC 688
2
( 2018) 11 SCC 508
O.M.P. (COMM.) 433/2020 Page 11 of 20
the road was less than 2000 mm/km, renewal was not required. Mr.
Ankur Mittal, learned Counsel for the NHAI confirms that this is,
indeed the position. However, he points out that the said award,
passed by the learned Arbitral Tribunal, in that case, has been
challenged by the NHAI before this Court, under Section 34 of the
1996 Act, in O.M.P. (COMM.) 533/2019 ( NHAI v. Nirmal BOT
Ltd. ), which is presently pending. Mr. Singh submits that, therefore,
where two Arbitral Tribunals, concerned with identical covenants,
between the NHAI and two contractors, have interpreted the covenants
differently, the normally existing restriction, on interference by the
High Court with the reasoning of the Arbitral Tribunal, in a challenge
under Section 34 of the 1996 Act, would not apply, and that, in order
to ensure uniformity, especially as such clauses have a pan-India
ramification, it is incumbent on the Court to clarify as to the correct
manner in which the clause is to be interpreted.
2
12. Mr. Singh also relies on para 49 of Nabha Power Limited ,
which reads thus :
“49. We now proceed to apply the aforesaid principles
which have evolved for interpreting the terms of a commercial
contract in question. Parties indulging in commerce act in a
commercial sense. It is this ground rule which is the basis of
The Moorcock test of giving „business efficacy‟ to the
transaction, as must have been intended at all events by both
business parties. The development of law saw the „five
condition test‟ for an implied condition to be read into the
contract including the „business efficacy‟ test. It also sought to
incorporate „The Officious Bystander Test‟ [ Shirlaw vs.
Southern Foundries (supra)]. This test has been set out in
B.P. Refinery (Westernport) Proprietary Limited vs. The
President Councillors and Ratepayers of the Shire of Hastings
(supra) requiring the requisite conditions to be satisfied: (1)
O.M.P. (COMM.) 433/2020 Page 12 of 20
reasonable and equitable; (2) necessary to give business
efficacy to the contract; (3) it goes without saying, i.e., The
Officious Bystander Test; (4) capable of clear expression; and
(5) must not contradict any express term of the contract. The
same penta-principles find reference also in Investors
Compensation Scheme Ltd. vs. West Bromwich Building
Society (supra) and Attorney General of Belize and Ors. vs.
Belize Telecom Ltd. and Anr. (supra ). Needless to say that
the application of these principles would not be to substitute
this Court‟s own view of the presumed understanding of
commercial terms by the parties if the terms are explicit in
their expression. The explicit terms of a contract are always
the final word with regards to the intention of the parties. The
multi-clause contract inter se the parties has, thus, to be
understood and interpreted in a manner that any view, on a
particular clause of the contract, should not do violence to
another part of the contract.”
13. It is in the aforesaid circumstances that, contends Mr. Singh, the
impugned directions of the learned Tribunal deserve to be set aside.
14. Mr. Singh also points out that the Independent Consultant,
engaged by the NHAI itself had, initially, vide communication dated
rd
23 September, 2013, addressed to the petitioner, opined that, in view
of the test report relating to the surface of the road as it existed till
2012, there was no necessity of any renewal thereof. He points out
that, in fact, the Independent Consultant was vacillating in his stand
and was at times, opining that no renewal was required, and, at others,
directing the petitioner at the instance of the respondent, to carry out
renewal.
15. Consequent to the passing of the impugned Award, the
Independent Consultant presently engaged by the respondent has
th
written, to the petitioner on 12 June, 2020, directing the respondent
O.M.P. (COMM.) 433/2020 Page 13 of 20
to execute the second periodic renewal of the highway. The letter also
purports to be in the nature of a notice issued under clause 18.12 of the
Concession Agreement, which reads thus :
“To,
The Project Manager,
GMR Pochanpalli Expressways Limited,
Kill 443+910 Toll Plaza
Ravellcy Village,
Kadlakallu (P.O),
Toopran MandaI, Medak (DlST.),
Telangana State, PIN: 502336
Sub:- Independent Engineer Services during Operation &
Maintenance stage of 4-laned divided carriageway from
Km.367.000(AdloorYellareddy)toKm.464.000
(GundlaPochanpali) (Contract Package No.NS-2/BOT/AP-2)
on Nagpur -Hyderabad Section of NH-44 (Old NH-7)in the
State of Telangana on BOT (Annuity) Basis under North-
South Corridor (NHDP Phase-H) and additional highway
from Km.464.000 (Gundla Pochanpalli) to Km.474.000
(Bowenpalli)- Request for Submission of Work Programme
nd
for 2 periodic Renewal of Wearing Surface of Road
Pavement - Notice Issued-Reg
Ref: 1. NHAI/PlU-NRMLlGPELlAP-2/2019/1334
dated 08.02.2020
2. NHAI/RO-HYDI11 0 18151AP-21lIRCII 6 I 0
dated 22.10.2020
3. Court orders dated 02.11.2018
4. GPEL FYI 8-19/4245 dated 06.11.2018
5. ICAl1942/AC-2139 dated 24.0] .2020
6. NHAT/RO-HYDI11018/5IAP-2/911lRCI3066
dated 11.02.2020
7. NHAI/RO-IYDI11018/5IAP-2!911/RC/3109
dated 14.02.2020
8. MSV_SU/TPRN/AP-2/220iGMRPELl8
dated 15.02.2020
9. GMRJGPELlAP-2INHAI-RO-Hyd/202015847
dated 09.03.2020
1O. MSV_SITITPRN/AP-2/2020/GMRPELl47
dated 02.05.2020
O.M.P. (COMM.) 433/2020 Page 14 of 20
11. MSV_SITITPRNIAP-2/2020/GMRPELl71
dated 27.05.2020
Dear Sir,
In continuation to our letter in reference (11) cited and
subsequent discussion had with the Regional officer NHAI,
RO, Hyderabad & the PD, NHAI, PIU, Nirmal during the
meeting held at NHAI, RO, Hyderabad on 11.06.2020 on the
above subject, it is informed as under.
In spite of repeated requests made by NHAI vide letters in
references (6&7) cited and IE vide letters in references (8,10
& 11) cited there is no response from the Concessionaire as on
date. Therefore, it is reminded once again to submit the work
program for (1) the patch work in the entire Project Highway
nd
and (ii) 2 Periodic Renewal in the entire 103 km length of
Project Highway on or before 15.06.2020. Otherwise, we may
nd
be forced to ask NHAI to execute the 2 Periodic Renewal for
entire Project Highway at the risk and cost of the
Concessionaire and to recover the same from Concessionaire.
In addition to recover of the aforesaid cost of repair and
maintenance by NHAI a sum equal to 25% (twenty five
percent) of such cost shall also be recovered by NHAI from
the Concessionaire as damages in accordance with CL. 18.12
(page no.53) of CA.
Further, it is to inform that Raising of the existing kerb shall
be taken up before laying of Bituminous Concrete work in
view of safety of live traffic. However, the painting of kerb
shall be taken up after laying of Bituminous Concrete work &
median filling works, after through cleaning of kerb for any
dirt, grease, bitumen and any other foreign materials.
Therefore, please ensure to incorporate the same while
preparing and submitting the work program for 2nd Periodic
Renewal of Wearing Surface of Road Pavement.
Please treat this as NOTICE ISSUED under clause 18.12
(page no.53) of the Concession Agreement.
This is for your information and immediate necessary action
please.”
O.M.P. (COMM.) 433/2020 Page 15 of 20
16. The aforesaid letter has also been challenged in these
proceedings, and stay of operation of the letter has been sought in the
interregnum.
17. Mr. Ankur Mittal, learned Counsel appearing for the NHAI,
seriously questions the manner in which Mr. Singh has sought to
interpret the covenants of the Concession Agreement, and submits that
the interpretation of the covenants by the learned Tribunal deserves to
be affirmed by this Court. He places emphasis on Clause 2.6.1 in
Schedule L to the Concession Agreement, which has been reproduced
hereinabove. Mr. Mittal points out that Clause 2.6.1(a)(i), which
requires renewal of the wearing surface of the road once every 5 years
does not make the said requirement conditional upon the roughness of
the road surface. Apropos Clause 2.6.1 (b)(ii) Mr. Mittal submits that
the reliance, by Mr. Singh on the said clause, is misplaced, as it relates
to maintenance activities arising out of specific needs on account of
site conditions and does not detract from the necessity of 5 yearly
renewal of the wearing surface of the road pavement. Adverting to
Clause 4.3.1 in Schedule L to the Concession Agreement, Mr. Mittal
submits that the interpretation, of the said clause, in para 79 of the
impugned award, merits acceptance. The stipulation, of bringing the
roughness of the road to the initial value of 2000 mm/km, submits Mr.
Mittal, is only for the purpose of laying down the minimum criteria,
with respect to the roughness index.
18. Mr. Mittal also seeks to rely on para 22 of the impugned award,
O.M.P. (COMM.) 433/2020 Page 16 of 20
to state, that even while fixing the annuity, payable to the petitioner,
the expense involved in the 5 year re-laying exercise had been
factored into the said annuity by the petitioner itself.
19. Mr. Mittal also seeks to discountenance the reliance, by Mr.
Singh, on the flow chart, extracted hereinabove, figuring in appendix
3.1 to Schedule L in the Concession Agreement, stating that the
stipulation “do nothing”, where the roughness survey compared
favourably with the operation/performance criteria, related to periodic
inspection of the pavement, and not to the 5-yearly renewal thereof,
which was mandatory. Apropos the stipulation in the table and
appendix 3.4 of Schedule L, stating that no repairs were needed where
the condition of the road was good, Mr. Mittal seeks to distinguish
between repairs of the road and the 5 yearly maintenance of the road,
which required re-laying thereof.
20. Mr. Mittal submits that the roughness index of the road merely
tests its riding quality, which cannot be determinative regarding the
requirement of 5-yearly maintenance.
21. In my considered opinion, serious questions regarding
interpretation of the clauses of the Concession Agreement, chiefly
Clauses 2.6.1 and Clause 4.3.1, figuring in Schedule L thereto, arise
for consideration. It is important to note that two learned Arbitral
Tribunals, interpreting identical clauses, have admittedly arrived at
two contrasting interpretations, which itself makes out a clear case for
examination of the issue by this Court, applying the principle
O.M.P. (COMM.) 433/2020 Page 17 of 20
1
enunciated in NHAI v. Progressive MVR. (JV) .
22. At this stage, there appears to be a great deal to be argued on
both sides, and, in my view, prima facie, there is some amount of
ambiguity in the manner in which the various covenants in Schedule L
to the agreement have been engrafted, which may also give rise to a
question of whether the principle of contra proferentem would be
amenable of invocation.
23. The issue, however, admittedly does not brook delay, in view of
the emergent direction issued by the learned Arbitral Tribunal. As
such, let notice issue on the petition as well as on I.A. 4775/2020, to
the respondent, to file its response thereto within a period of three
weeks with advance copy to the petitioner who may file his rejoinder,
thereto, within a period of one week thereof.
th
24. Let the petition be set down for final disposal on 24 July,
2020.
25. It is absolutely clear that there shall be no extension of time
granted to file the reply to the petition or the rejoinder thereto, and that
failure to do so within the time stipulated hereinabove would result
ipso facto, in closing the right to file the reply/rejoinder.
26. Insofar as the prayer for interim relief is concerned, Mr. Ankur
Mittal submits that, even if the petitioner were to carry out the re-
laying work, as directed by the learned Tribunal, and by the impugned
O.M.P. (COMM.) 433/2020 Page 18 of 20
th
communication dated 12 June, 2020, issued by the independent
consultant, no prejudice would result, as the petitioner would be liable
to be recompensed for the work undertaken by it.
27. On the principles of balance of convenience, I am of the opinion
that, when there are the very issue of the requirement of carrying out
the renewal work is at large, requiring to be interpreted, and another
Tribunal, dealing with a similar clause, has interpreted the agreement
in the manner canvassed by Mr. Singh (which itself discloses a prima
facie case worth examination), it would be more appropriate to allow
the status quo to continue, and stay the operation of the impugned
direction of the learned Tribunal till the next date of hearing. In case
it is found that the impugned directions are in order and that the
petitioner is required to undertake the relaying of the work, the said
exercise could always commence after the arrival, at such a decision,
by this court. If, however, this Court were to find finally, that the
impugned directions are not justified or in accordance with the
intention of the parties as contained in the Concession Agreement, the
work done could not be undone and it would also involve avoidable
drain on the public exchequer.
28. Applying, therefore, the principle of balance of convenience, I
am of the view that the impugned directions of the learned Arbitral
th
Tribunal, as well as the operation of the letter dated 12 June, 2020,
issued to the petitioner by the presently existing Independent
Consultant, deserve to be stayed till the next date of hearing.
O.M.P. (COMM.) 433/2020 Page 19 of 20
29. It is ordered, accordingly.
C. HARI SHANKAR, J
JULY 01, 2020/ kr
O.M.P. (COMM.) 433/2020 Page 20 of 20