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2019 Supreme(Del) 903

IN THE HIGH COURT OF DELHI AT NEW DELHI
NAVIN CHAWLA, J.
National Highways Authority Of India - Appellant
Versus
Pune Sholapur Road Development Company Limited - Respondent
Original Miscellaneous Petition (Comm) No. 128 of 2018; Interlocutory Application No. 3857 of 2018
Decided on : 14-03-2019

Advocates:
Advocate Appeared:
Sudhir Nandrajog, Adv., Keshav Mohan, Adv., Rishi K Awasthi, Adv., Ritu Arora, Adv., Arun Kathpalia, Adv., Kaushik Laik, Adv.

Headnote:

The petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “Act”) has been filed by the petitioner challenging the Arbitral Award dated 30.11.2017 passed by the Arbitral Tribunal adjudicating the disputes that have arisen between the parties in relation to the Concession Agreement dated 30.09.2009 executed between the parties for the work of “Design, Engineering, Construction, Development, Finance, Operation and Maintenance of 4 laning of Pune Solapur Section of NH 9 from Km 144.400 to Km 249.000 in the State of Maharashtra under NHDP Phase III on Design, Build, Finance, Operate and Transfer (DBFOT) basis”.

Fact of the Case:

The petitioner was in breach of its representations and warranties under Clause 7.2 of the Concession Agreement. The petitioner was aware that the instant project was passing through a Wildlife Sanctuary and it had to seek clearance from the National Wildlife Board before any work could be undertaken. However, the petitioner did not disclose the above fact to the respondent at the time of entering into the Concession Agreement, thereby committing breach of its Warranties under Clause 7.2(e), (f), (g) and (i) of the Concession Agreement.

Finding of the Court:

The Arbitral Tribunal has rightly held that the “Right of Way” means unrestricted access to the land such that the construction, operation and maintenance of the project highway can be undertaken in accordance with the Concession Agreement. In terms of Clause 4.1.2 (a) it was the obligation of the petitioner to procure for the Concessionaire/respondent the Right of Way to the site. In terms of Clause 10.3.2, upon the respondent achieving the financial closure, the respondent should have been granted vacant access and Right of Way to atleast 80% of the total area of the Site required and necessary for the four lane project highway.

Issues: Whether the Arbitral Tribunal has held that the respondent had given up its claim under Clause 4.2 and 10.3.4 of the Concession Agreement. Whether Clause 35.2 of the Concession Agreement could have been invoked by the Arbitral Tribunal for awarding damages in favour of the respondent. Whether the petitioner was in breach of its representations and warranties under Clause 7.2 of the Concession Agreement.

Ratio Decidendi: The present case was a breach of warranty under Clause 7.2 of the Concession Agreement and therefore, Clause 4.2 shall not be applicable. The Arbitral Tribunal has further held that the present case was a case of misrepresentation under Section 18 of the Contract Act entitling the respondent to claim damages under Section 19 of the Contract Act.

Final Decision: The petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “Act”) has been filed by the petitioner challenging the Arbitral Award dated 30.11.2017 passed by the Arbitral Tribunal adjudicating the disputes that have arisen between the parties in relation to the Concession Agreement dated 30.09.2009 executed between the parties for the work of “Design, Engineering, Construction, Development, Finance, Operation and Maintenance of 4 laning of Pune Solapur Section of NH 9 from Km 144.400 to Km 249.000 in the State of Maharashtra under NHDP Phase III on Design, Build, Finance, Operate and Transfer (DBFOT) basis”. The petition is dismissed with cost quantified as Rs.75,000/-.

JUDGMENT :

Navin Chawla, J.

This petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “Act”) has been filed by the petitioner challenging the Arbitral Award dated 30.11.2017 passed by the Arbitral Tribunal adjudicating the disputes that have arisen between the parties in relation to the Concession Agreement dated 30.09.2009 executed between the parties for the work of “Design, Engineering, Construction, Development, Finance, Operation and Maintenance of 4 laning of Pune Solapur Section of NH 9 from Km 144.400 to Km 249.000 in the State of Maharashtra under NHDP Phase III on Design, Build, Finance, Operate and Transfer (DBFOT) basis”.

2. The Arbitral Tribunal by the Impugned Award granted the following claims of the respondent:-

S. NO.

Description

As claimed

As awarded

I.

Damages under Clause 4.2 of the Concession Agreement

8.35

Nil

II.

Damages under Clause 10.3.4 of the Concession Agreement

3.18

Nil

III.

Compensation under Clause 35.2 of the Concession Agreement, or otherwise under law

 

 

A.

Loss on account of Escalation

97.12

88.38

B.

Loss of Interest during Construction

141.88

140.12

C.

Costs of underutilized and idle resources

i.

Costs of underutilized and idle resources prior to declaration of the Appointed Date

96.73

46.98

ii.

Costs of underutilized and idle resources after declaration of the Appointed Date

115.12

70.85

D.

Costs of construction of additional diversions

1.31

Nil

E.

Loss of Toll Revenue

i.

Loss of Toll Revenue on account of partial commercial operations of the Project Highway for reasons attributable to the Respondent

232.10

66.30

ii.

Loss of Toll Revenue on account of the delayed issuance of Provisional Certificate for reasons attributable to the Respondent

19.65

7.42

F.

Cost of maintenance of the Existing Lanes? for an extended period

1.67

Nil

G.

Cost of additional Programme Management Fee incurred or liable to be incurred by the Claimant

40.10

12.00

H

Cost of additional premium amounts paid by the Claimant towards renewal of its insurance policies during the Construction Period

2.31

1.44

Total Amount

759.52

433.49

IV.

Claim under Clause 35.3 for extension of the Concession Period

1198 days

Nil

3. The learned senior counsel for the petitioner submits that the Arbitral Tribunal has held that the respondent had given up its claim under Clause 4.2 and 10.3.4 of the Concession Agreement. He submits that Clause 4.2 and 10.3.4 provide for liquidated damages in the case of the petitioner failing to procure fulfillment of any or all of the Conditions Precedent set forth in Clause 4.1.2 within the period specified in respect thereof and on the petitioner failing to provide and grant the Right of Way to the Concessionaire in respect of the land included in the Appendix to the Concession Agreement respectively. The petitioner having been found in breach of compliance of the Conditions Precedent as set out in clause 4.1.2 of the Concession Agreement for not being able to handover the land in terms of Clause 10.3.1 of the Concession Agreement, the liquidated damages only under Clause 4.2 and 10.3.4, if at all, could have been granted in favour of the respondent. The Arbitral Tribunal, however, has proceeded to award damages under Clause 35.2 of the Concession Agreement, which is a Clause providing for liquidated damages for breach other than the one for which damages have been provided in other parts of the Agreement. Relying upon the judgment of the Supreme Court in Steel Authority of India Limited v. Gupta Brothers Steel Tubes Limited, (2009) 10 SCC 63, he submits that Clause 35.2 of the Concession Agreement could not hav




































































































































































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