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2017 Supreme(SC) 1610
SUPREME COURT OF INDIA
Jagdish Singh Khehar, CJI., D.Y. Chandrachud, J.
Union of India – Appellant
Versus
Hetovi Kappo and Others – Respondents
Civil Appeal Nos.342-343 of 2017, Arising out of SLP(C) Nos.30422-30423 of 2016
Decided On : 11-01-2017
For the Petitioners:Mr. Ranjit Kumar, SG, Mr. Ajit Kumar Sinha, Sr. Advocate, Mr. Ashok Panda, Sr. Advocate, Ms. Bharti Tyagi, Mr. Rajat Nair, Advocates for Mr. D.S. Mahra, Advocate
For the Respondent:Mr. Gautam Talukdar and Mr. C.M. Kennedy, Advocates, Mr. K.K. Venugopal, Sr. Advocate, Mr. Edward Belho, AAG, Mr. K. Luikang Michael, Mr. Elix Gangmei, Mr. Somanatha Padhan, Advocates, Dr. Abhishek Manu Singhvi, Mr. Pravin H. Parekh, Sr. Advocates, Mr. E.R. Kumar, Mr. Sastry Kuppa, Mr. Vishal Prasad, Mr. Tanuj Agarwal, Ms. Raveena Rai, Ms. Tanya Chaudhry, Advocates for M/s. Parekh & Co.
The court clarified the interpretation of the arbitration clause for settling dues between the contractor and the State of Nagaland, emphasizing the importance of adhering to the specified time frame for project completion.
Headnote:
Public Interest Litigation - Road Construction - Arbitration Act, 1996 - [Article 226, Constitution of India] - [Arbitration and Conciliation Act, 1996, Clause 25.3] - The court directed the completion of a road project within a specified time frame and allowed the contractor to recover dues through arbitration.
Fact of the Case:
A public interest litigation was filed in the Gauhati High Court to expedite the construction of a 329 kilometers road project. The High Court had issued directions to complete the project without delay and required payments to be released to the contractor for the work already executed.
Finding of the Court:
The court found that the road project could not be completed through the existing contractor and allowed the appellant to retender the project. It directed the completion of the project within three years and six months. The court also clarified the arbitration clause for settling dues between the contractor and the State of Nagaland.
Issues: Expedited completion of road project, settlement of dues to the contractor, interpretation of arbitration clause.
Ratio Decidendi: The court decided that the road project should be retendered and completed within a specified time frame. It also clarified the interpretation of the arbitration clause for settling dues between the contractor and the State of Nagaland.
Final Decision: The impugned order passed by the High Court was set aside, and the appeals were allowed. The court directed the completion of the road project within three years and six months and allowed the contractor to recover its dues through arbitration.
ORDER :
Leave granted.
2. A public interest litigation, was filed in the Gauhati High Court, invoking the jurisdiction of the High Court under Article 226 of the Constitution of India. The petitioner had invoked the writ jurisdiction of the High Court, in an effort to expedite the laying of a 329 kilometers road, the construction whereof had been stalled. It is for the aforesaid objectives, that the petitioner before the High Court, had prayed as under :
"1. To issue a writ in the nature of Mandamus and/or any other appropriate writ, order or directions directing the respondent authorities to complete the two-laning work of the approach road from Hebolimi Village to the National Highway in particular and also all the other parts of the 329 kms of roads under the present project, as early as possible even by applying alternate means, if necessary;
2. To issue a writ in the nature of Mandamus and/or any other appropriate writ directing the respondent authorities to reject the Revised Cost Estimate submitted by M/s. Maytas-Gayatri (Joint Venture) through the Chief Engineer (National Highway) Nagaland, PWD, vide official correspondence dated 20.02.2012;
3. To issue a writ in the nature of Mandamus and/or any other appropriate writ directing the respondent authorities to blacklist M/s. Maytas-Gayatri (Joint Venture) from further tender works in the Public Works Department, Government of Nagaland.
4. To issue a writ in the nature of mandamus and/or any other appropriate writ directing and enquiry by the Central Bureau of Investigation (CBI) in the Mega Project in the State of Nagaland initiated by the Public Works Department converting a total length of 329 kilometers road for two laning from (i). Mon-Tamlu-Merangkong, (ii). Longleng-Changtongya, (iii). Phek-Pfutsero and (iv). Chakabama-Zunheboto and this Hon'ble Court may be further pleased to supervise such enquiry by the Central Bureau of Investigation (CBI).
And/or pass such further order/orders as Your Lordship may deem fit and proper in the facts and circumstances of the case."
3. It seems that the High Court, in its desire to ensure completion of the above road project expeditiously, had issued directions to Respondent No.7 to complete the project without any delay. In order to achieve the aforesaid objective, the High Court had even required the progress thereof, to be supervised by Hon'ble Mr. Justice R.B. Mishra, a former Judge of the Gauhati High Court. The High Court had even required payments to be released to Respondent No.7-M/s. Maytas-Gayatri, for the work already executed. In this behalf, it would be necessary to record, that in the estimation of the High Court, an approximate amount of Rs.540.31 crores, was payable to Respondent No.7, for the work already executed.
4. On 7th October, 2016, this Court passed the following directions, and sought a report from the appellant herein, and from the State of Nagaland :
"We do not for the present intend to express any final opinion on the contentions urged on behalf of the petitioner and those strenuously put forth by Dr. Abhishek Manu Singhvi appearing for the contractor lest we prejudice the case of anyone of the two parties. All that we are inclined to do for the present is to secure the following information from the parties:-
(i) Who all are parties to the agreement with the contractor in relation to works in dispute? A copy of the contract/document shall be placed on record by the Union of India and/or Government of Nagaland as the case may be.
(ii) At what stage was it first noticed by the Government of India and/or Government of Nagaland that the contractor was committing the defaults in the execution of the contracted works? Material to support the version regarding the earliest occurrence and noticing of defaults committed by the contractor shall be placed on record.
(iii) What action, if any, was proposed by the Government of India and/or the Government of Nagaland on account of the defaults reported against the contractor ei
