Full Judgment Text
NEUTRAL CITATION NO. 2023:DHC:3005
* IN THE HIGH COURT OF DELHI AT NEW DELHI
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% Date of order : 18 April, 2023
+ O.M.P.(I) (COMM.) 59/2023 & I.A. 7212/2023
PS TOLL ROAD PRIVATE LIMITED ..... Petitioner
Through: Mr. Pranjit Bhattacharya, Advocate
versus
NATIONAL HIGHWAY AUTHORITY OF INDI..... Respondent
Through: Ms. Gunjan Sinha Jain, Advocate
CORAM:
HON'BLE MR. JUSTICE CHANDRA DHARI SINGH
O R D E R
CHANDRA DHARI SINGH, J (Oral)
1. The instant petition under Section 9 of the Arbitration and
Conciliation Act, 1996 (hereinafter “the Arbitration Act”) has been filed
on behalf of the petitioner seeking the following reliefs:
“(i) Restrain the Respondent by way of an order and
injunction, from suspending the rights of the petitioner as the
concessionaire including giving effect to Notice for
Suspension issued by the Respondent on 14.02.2923 and any
actions consequential or incidental thereto;
(ii)Pass ad interim and interim ex parte reliefs in terms of
prayer above;
(iii) Order costs of the Petition to be borne by the
Respondent; and
(iv)Pass such further and other reliefs as a nature and
circumstances of the case may require.”
O.M.P.(I) (COMM.) 59/2023 Page 1 of 7
Signature Not Verified
Digitally Signed
By:GAURAV SHARMA
Signing Date:03.05.2023
17:34:33
NEUTRAL CITATION NO. 2023:DHC:3005
2. Learned counsel appearing on behalf of the petitioner submitted
that the petitioner is a company incorporated under the Companies Act,
1956, a Special Purpose Vehicle and is a wholly-owned subsidiary of
Reliance Infrastructure Limited. The respondent is the National Highway
Authority of India (hereinafter “NHAI”), a Government enterprise
involved with maintenance of national highways across the country.
3. It is submitted that the parties entered into a Concession
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Agreement dated 10 March, 2010 for undertaking the project for Six
Laning of Pune - Satara Section of NH-4from 725.00 kms to 863.350 kms
(length - 140.350 kms) in the State of Maharashtra to be executed as EOT
(Toll) on DEPOT Pattern- under NHDP Phase V (Package No. NHDP-
V/MC-II/14) (hereinafter "the Project").
4. It is submitted that during the course of the work, the petitioner
encountered delays in the project timeline from the appointed date, which
were not attributable to the petitioner, whereupon it made several
representations/applications to NHAI seeking extension of the time
period. These reasons include delays on account of handing over of
encumbrance free vacant access of ROW by NHAI, delay in issuance of
applicable permit relating to environmental protection and conservation
of the site, delay in permission for tree cutting, delay in the mobilization
of IE, delay in publication of encroachment notices, delay in acquisition
of additional land requirement and the occurrence of Force Majeure
event being the COVID- 19 pandemic.
5. It is submitted that despite the above circumstances, the Notice of
O.M.P.(I) (COMM.) 59/2023 Page 2 of 7
Signature Not Verified
Digitally Signed
By:GAURAV SHARMA
Signing Date:03.05.2023
17:34:33
NEUTRAL CITATION NO. 2023:DHC:3005
intent to terminate the Concession Agreement was furnished by the
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respondent on 21 May 2020 granting the petitioner 15 days’ time to
make a representation. Thereafter, communications were exchanged
between the parties whereby the petitioner expressed its readiness and
willingness to complete the Project. However, the respondent suspended
the rights of the petitioner as a Concessionaire under the Concession
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Agreement by way of issuance of a Suspension Notice dated 14
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February 2023, which came to be withdrawn by the letter dated 17
February 2023.
6. It is submitted that the issuance of Notice of Suspension was in
gross violation of Clause 36.1 and Clause 37.1 of the Concessionaire
Agreement since the provision stipulates that only in the case of default
on the part of the Concessionaire, its rights may be suspended by the
respondent. The clauses further stipulate that a default would accrue only
in the event of default specified in the said Clause occurs and the
Concessionaire fails to cure the default within the cure period set forth in
the said clause or where no Cure period is specified, within a Cure period
of 60 days, unless default has occurred as a result of any breach of this
Concession Agreement by the Authority or due to Force Majeure . It is
submitted that without giving the Cure period of 60 days, and the expiry
thereto, no default can be attributed to the Concessionaire under the
Agreement.
7. The learned counsel for the petitioner submitted that there is no
occurrence of Concessionaire Default in the instant case and thus,
issuance of Notice for Suspension is mala fide, illegal and unwarranted.
O.M.P.(I) (COMM.) 59/2023 Page 3 of 7
Signature Not Verified
Digitally Signed
By:GAURAV SHARMA
Signing Date:03.05.2023
17:34:33
NEUTRAL CITATION NO. 2023:DHC:3005
Moreover, the action on behalf of the respondent is premature and
flawed.
8. It is submitted that the petitioner submitted prolongation cost
claims as the Project could not be completed within the stipulated times
for the reasons not attributable to the petitioner. As the said claims were
rejected by respondent, the petitioner invoked disputes resolution
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mechanism by issuing Dispute Notice dated 14 October 2022 under
Clause 44.1.1 of Concession Agreement and requested for resolution of
dispute amicably. Since, the respondent failed to reply or take any action
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within the stipulated timeframe, the petitioner vide its letter dated 23
December 2022 invoked Arbitration and also nominated an Arbitrator.
Since the respondent did not nominate its Arbitrator within the stipulated
timelines, the petitioner approached this Court under Section 11 of the
Arbitration Act by way of filing ARB. P. NO. 100/2023 for appointment
of Arbitrator.
9. Learned counsel for the petitioner submitted that the petitioner has
filed the instant petition seeking intervention of this Court to restrain the
respondent from taking any coercive action with respect to suspension
under Clause 36.1 of the Concession Agreement entered into between the
parties. The petitioner apprehends that the respondent may revive its
Suspension Notice or terminate the Concession Agreement which was
earlier withdrawn by it.
10. Per Contra, the learned counsel for the respondent vehemently
opposed the instant petition. The learned counsel submitted that an
O.M.P.(I) (COMM.) 59/2023 Page 4 of 7
Signature Not Verified
Digitally Signed
By:GAURAV SHARMA
Signing Date:03.05.2023
17:34:33
NEUTRAL CITATION NO. 2023:DHC:3005
Arbitral Tribunal has already been constituted for adjudication and
resolution of disputes between the parties, therefore, the averments made
and the grounds raised on behalf of the petitioner before this Court in the
instant petition may be raised before the Arbitral Tribunal so constituted.
11. It is submitted that there is no relief which accrues to the petitioner
and may be granted by this Court, therefore, the instant petition may be
dismissed.
12. Heard the learned counsel for the parties and perused the record.
13. The petitioner has approached this Court by way of the instant
petition seeking urgent relief against the respondents. The petitioner
apprehends that an action may be taken by the respondent and the
Concession Agreement may be terminated or suspended by them. To
support the averments, the learned counsel for the petitioner referred to
and cited the previous incidents whereby the respondent had issued a
Notice of Suspension but which was withdrawn by the respondent.
14. Upon perusal of the record as well as the arguments advanced on
behalf of the parties, this Court finds that there are disputes between the
parties, which may be adjudicated and settled by an arbitrator. Moreover,
it has been informed that an Arbitral Tribunal has already been
constituted between the parties to adjudicate and resolve the disputes
arising out of the Concession Agreement.
15. At this juncture, it is deemed pertinent to reiterate the intent and
purpose of enacting the Arbitration Act which facilitates a mechanism to
O.M.P.(I) (COMM.) 59/2023 Page 5 of 7
Signature Not Verified
Digitally Signed
By:GAURAV SHARMA
Signing Date:03.05.2023
17:34:33
NEUTRAL CITATION NO. 2023:DHC:3005
the public to resolve their disputes in a process less rigorous, technical
and formal than that of a litigation. Arbitration, conciliation and other
alternate mechanisms of dispute resolution have proven to be easier, more
accessible, efficient and even cost effective for the parties involved,
whether at an individual level or at the level of a business or corporation.
The alternative dispute mechanism is not only advantageous for the
people involved in disputes but has also been aiding the effective disposal
and release of burden on the Courts of the Country. It has been time and
again reiterated that where in terms of an Agreement or otherwise, the
parties to a dispute agree to resolve them amicably, they may be referred
to arbitration where the minimum tests, including that of arbitrability of
disputes, are satisfied.
16. In the instant case, there is an Agreement in existence which has
given rise to the contractual relationship between the parties and which
has also given rise to the disputes between them. There is no challenge to
the fact that the disputes between the parties are arbitrable in nature.
Moreover, there is an arbitration clause, i.e., Article 44, in the Agreement
which entitles the parties to invoke arbitration proceedings. In accordance
with the provision, the parties have made attempts to have the disputes
between them resolved amicably. The petitioner had also sent several
notices and communications to the concerned authorities of respondent
explaining its circumstances and calling upon the respondent to resolve
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the issues amicably vide Notice dated 14 October 2022. Hence, the basic
requirements of the Arbitration Act are not standing in way of reference
of the disputes between the parties to arbitration. Since an Arbitral
O.M.P.(I) (COMM.) 59/2023 Page 6 of 7
Signature Not Verified
Digitally Signed
By:GAURAV SHARMA
Signing Date:03.05.2023
17:34:33
NEUTRAL CITATION NO. 2023:DHC:3005
Tribunal has already been constituted, it is also found that the disputes
between the parties may be considered, adjudicated upon and be finally
resolved the arbitrator. The petitioner has the liberty, including filing an
application under Section 17 of the Arbitration Act, to raise before the
Arbitral Tribunal all issues and grounds that have been raised before this
Court by way of the instant petition.
17. Therefore, keeping in view the spirit and purpose of the Arbitration
Act, the nature of disputes between the parties, the fact that an Arbitral
Tribunal has already been constituted which may consider, appreciate and
adjudicate upon the grounds invoked by both the parties, at this stage, this
Court is not inclined to pass any order granting the reliefs as sought on
behalf of the petitioner.
18. Accordingly, the instant petition is dismissed since the petitioner
has failed to show any cogent reason for granting the interim relief prayed
for.
19. Pending applications, if any, also stand dismissed.
20. The order be uploaded on the website forthwith.
CHANDRA DHARI SINGH, J
APRIL 18, 2023
gs/ms
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O.M.P.(I) (COMM.) 59/2023 Page 7 of 7
Signature Not Verified
Digitally Signed
By:GAURAV SHARMA
Signing Date:03.05.2023
17:34:33