Deductions contrary to an arbitral award are impermissible. Fresh arbitration notices can be issued if new disputes arise, despite prior awards.

JUDGMENT

Vibhu Bakhru, J. (Oral)

[Hearing Held Through Video-conferencing]

1. The petitioner (hereafter `TML') has filed the present petition under Section 9 of the Arbitration & Conciliation Act, 1996 (hereinafter `the A&C Act'), inter alia, praying as under:

"(a) Stay of the impugned communication dated 05.02.2021 bearing no. CWS-I/DY.CGM(M)/Plng./2021/08 addressed by the Respondent to Petitioner;

(b) Pass an order from restraining the Respondent acting upon and giving effect including adjusting/recovering of the alleged cost of excess CNG (Rs.127.86 crores approx.) consumed as per Fuel Efficiency Norms in terms of the impugned communication dated 05.02.2021 bearing no. CWS-I/DY.CGM(M)/Plng./2021/08 addressed by the Respondent to Petitioner, from the contractual quarterly payments towards AMC or from any other payment due; or

(c) Pass ex-parte ad-interim orders in terms of aforementioned prayer (a) & (b) above and confirm the same upon notice pending final adjudication of the present petition;

2. TML is a company engaged in the business of manufacturing and selling wide range of buses as well as light, medium and heavy commercial vehicles. The respondent (hereafter `DTC') is a statutory body and is the principal public transport operator in Delhi.

3. On 31.01.2008, DTC issued a Request for Proposal (RFP) inviting offers for supply of `CNG propelled bus chassis and fully built up CNG buses for supply of Low Floor CNG propelled City type non AC and AC buses'. The bidders were also responsible for maintaining the said buses for a length of 7,50,000 kms. TML participated in the said tender and was declared successful. Subsequently, the parties entered into an agreement dated 18.10.2008, whereby TML agreed to provide buses and maintain the same for 7,50,000 kms.

4. Certain disputes arose between the parties in connection with the contract in question. The said disputes were referred to arbitration. One of the disputes raised in the arbitration related to the consumption norms of CNG. TML contended that the consumption norms are covered under Clause 24.4.1 of the General Conditions of Contract (GCC) issued along with the Request for Proposal. However, DTC contended that excess consumption of CNG was required to be calculated and recovered in terms of Clause 46.16 of the Annual Maintenance Contract (AMC).

5. The said dispute was adjudicated in favour of TML in terms of the arbitral award dated 16.08.2017. DTC has not accepted the said award and has impugned the same under Section 34 of the A&C Act [OMP(COMM) No.425/2017]. However, the said award has not been stayed.

6. Notwithstanding that TML has prevailed in the arbitration, DTC is insisting in making deductions on account of fuel efficiency norms from the amounts payable to TML, as according to it, excess consumption is required to be computed and recovered under Clause 46.16 of the AMC. Aggrieved by the said deductions, TML has filed the present petition.

7. This Court has pointedly asked Mr. Vashisht, learned senior counsel appearing for DTC, whether the controversy is covered in favour of TML in terms of the arbitral award dated 16.08.2017. He fairly conceded in the affirmative. He also stated that there was no dispute that if the said arbitral award is sustained, the deductions sought to be made pursuant to the letter dated 05.02.2021, would be impermissible. He, however, stated that since the period covered under the arbitration (which culminated in the arbitral award dated 16.08.2017) was different, DTC was not precluded to deduct the amount against excess consumption, according to its stand, till the matter is finally decided.

8. Mr. Vashisht further states