Point of Law: Loan - Payment of Debt Due - Escrow Account - Under C.A. even if termination had occurred because of faults of petitioner/NBTPL, respondent/NHAI had nevertheless to deposit 90% of Debt Due into Escrow Account.

JUDGMENT :

ASHA MENON, J.

O.M.P. (I) (COMM) No. 152/2021 and I.A. No. 7511/2021 (by the petitioner u/s 151 CPC for filing amended written submissions along with updated relevant documents/judgments)

1. This petition has been filed by the petitioner/Navayuga Bengalooru Tollway Pvt. Ltd. (for short, “NBTPL”) under Section 9 of the Arbitration and Conciliation Act, 1996 (for short “A&C Act”) seeking the following reliefs:

“(i) Direct the respondent to release and/or deposit the amount of at least the 90% of the total Debt Due amounting to Rs. 395.11 crores in the Escrow Account and/or pay the said amount to the Lenders mentioned above.

(ii) Direct the respondent to pay 90% of the Debt due including 90% of the subordinate Debt amounting to Rs. 693.89 Cr. to Project Lenders and Sub-Debt holders.

(iii) Pass such other or further Orders as this Hon'ble Court may deem fit and proper in the interest of justice.”

2. The facts as are relevant for the disposal of the present petition are that the petitioner/NBTPL was set up as a Special Purpose Vehicle Company under the Companies Act, 1956 with its registered office at Hyderabad, especially for the Designing, Engineering, Finance, Construction, Operation and Maintenance of Access controlled highway project namely, the development and the capacity improvement of the existing carriageways from km 10.000 to 29.500, on the Bangalore-Nelamangala section of the National Highway No. 4 (NH-4) in the State of Karnataka on BOT basis for the respondent/National Highway Authority of India (for short, “NHAI”).

3. The respondent/NHAI had invited proposals under Single Stage Process from bidders prescribing qualifications and the commercial terms and conditions for selection of a successful bidder under its Request for Proposal (RFP) dated 29th May, 2006. The petitioner/NBTPL qualified for undertaking the work on BOT basis and the respondent/NHAI accepted their bid and issued its Letter of Acceptance (LOA) being No. NHA1/GM (MC-III)/NH-4BNG-NEL/61 dated 1st March, 2007. The Concession Agreement (for short “C.A.”) dated 9th May, 2007 was executed between the parties. In terms of the said C.A. the petitioner/NBTPL also furnished Performance Security on 17th March, 2007 by submitting a Bank Guarantee for an amount of Rs. 22.25 crores. The petitioner/NBTPL claims that it also achieved Financial Closure within the specified time under the C.A. by signing the Common Loan Agreement with Lenders dated 5th December, 2007 for Rs. 539 crores. The lenders were a consortium of public sector banks with the Oriental Bank of Commerce as the Lenders' Agent.

4. The project was completed in the year 2010 by December after which the petitioner/NBTPL became entitled to collect the tolls which they continued to do till 2020. However, certain disputes and differences arose between the parties and it appears that both sides terminated the C.A. the petitioner/NBTPL issuing Termination Notice dated 21st October, 2020 and the respondent/NHAI issuing Notice of Termination on 10th March, 2021.

5. Ms. Meenakshi Arora, learned Senior Counsel appearing for the petitioner/NBTPL submitted that the disputes arose on account of the fact that there were leakages occurring due to traffic being allowed on service roads and non-allocation of land for expansion of the toll-plaza and the repeated requests to the respondent/NHAI did not lead to any rectification of the problem, which she agreed, could be an arbitral dispute. But according to her, under the terms and conditions of the C.A. particularly Clauses 32.3 and 32.4.2, the termination of the agreement obligated the respondent/NHAI to make the payment of the Debt Due as defined therein. She submitted that despite all papers having been submitted to the respondent/NHAI, including the Statutory Certificate issued by the Statutory Auditors, which alone was sufficient for initiating payment, the respondent/NHAI had not done so. She drew the attention of this Court to the definitions of “Debt Due, Termin