Ashoka Infraways Ltd. vs State of M. P.

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2016 Supreme(MP) 65

MADHYA PRADESH HIGH COURT
Smt. S.R. Waghmare and Prakash Shrivastava, JJ.
Ashoka Infraways Ltd. and another v. State of M.P. and another
Arbitration Appeal No.11 of 2015 (Indore) : against the order dated 16.2.2015, passed by Ist Additional District Judge, Dewas in Arbitration Case No.1 of 2015; Decided on 4.2.2016.

Advocates:
Piyush Mathur with Akash Vijaywargiya, H.Y. Mehta and
Paresh Joshi for appellants.
Pushyamitra Bhargava, Deputy Advocate General with Rohit Mangal for respondent/State.

Headnote:(1) Arbitration and Conciliation Act, 1996 -- Ss.9 and 37 -- M.P. Madhyastham Adhikaran Adhiniyam, 1983 -- Ss.2, 2(1)(i), 2(1)(d), 3 and 17-A -- project of road construction maintenance, collection of toll for taking care thereof based out to appellants for concession period -- both parties entered into agreement as a concession agreement -- it was under BOT scheme framed by Government -- appellant had to utilise and arrange funds and after completion of construction recover amount by way of toll collection -- present case is not a works contract -- matter pertains to non-extension of additional period conceded and not being granted -- application under filed -- rejected by lower Court -- appeal -- dispute pertains to concession or concessional period given in terms of concession right or concession area -- during contract period -- appeal allowed -- impugned order set aside.
       Held : Similarly considering the fact that the factual matrix pertains to non-extension of the additional period conceded and not being granted which led to the filing of the application under section 9, then we have no hesitation in holding that although the work pertains to construction of road ... yet the dispute pertains to the concession or concessional period given in terms of the concession right or concession area during the contract period. 2014(2) MPLJ 276 relied on. 2008(1) JLJ 50 (FB), 1988 JLJ 601 and 2002(5) MPHT 245 distinguished.
        [Para20
       (2) Arbitration and Conciliation Act, 1996 -- Ss.9 and 37 -- M.P. Madhyastham Adhikaran Adhiniyam, 1983 -- Ss.2, 2(1)(i), 2(1)(d), 3 and 17-A -- dispute regarding breach or termination referred under Act of 1996 -- however provisions of Act 1983 involved -- matter shall be regulated by Act of 1983 -- Arbitration Tribunal shall be constituted under section 3 of same Act -- appeal allowed -- impugned order set aside.
       Held : However, the provision has been invoked by the petitioners-appellants stating that in section (d) of section 2 of Madhya Pradesh Madhyastham Adhikaran Adhiniyam 1983 is involved then the matter shall be regulated by the Act of 1983 and the Arbitration Tribunal shall be constituted under section 3 of the said Act.
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ORDER

Smt. Waghmare, J. -- 1. By this arbitration appeal under section 37 of the Arbitration and Conciliation Act, 1996 the appellant Ashoka Infraways Limited is aggrieved by order dated 16.2.2015 passed by the Ist Additional District Judge, Dewas in Arbitration Case No.1/15 whereby the learned Judge dismissed the application under section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter called “the Act” for brevity) filed by the appellants holding that the dispute was covered under the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 Act and not under the Act of 1996.

2. Briefly stated the facts of the case are that the Ashoka Infraways Limited was a subsidiary of appellant No.2 Ashoka Buildcon Limited and the appellant No.1 was incorporated as “Special Purpose Vehicle” (SPV) for the purpose of implementing the Dewas Bypass Road Project. Thereby indicating that the appellant No.2 company was engaged inter alia in the business of construction and civil works. It has been submitted by the counsel for the appellants that it was one of the leading highway developers in the country and have executed various prestigious projects on the national as well as state level. That the respondent No.1 State of M.P. through its Principal Secretary, Public Works Department, Bhopal issued bid notice No.13/2000-2001/SAC/Dewas dated 18.7.2001 inviting bids for construction, replacement, periodical renewal and maintenance of Dewas Bypass Road for a total length of 19.8 kilometers and the construction included of one medium bridge, 27 culverts, junctions and rotaries, protection works, toll tax barriers and booth, plantation, fencing, truck parking lay-bye and longitudinal drains etc as fully detailed in the petition. The project was to be under the B.O.T. Scheme, i.e., under the Build Operate Transfer Scheme whereby the contractor has the right to collect the toll and the other revenue from the vehicles and users of the said Project during the concession period. Appellant No.2 Ashoka Buildcon Limited submitted its bid which was accepted by the respondents vide letter dated 17.4.2001. Thereafter to facilitate the process of financing the project, appellant No.1 was incorporated as an SPV by the appellant No.2 for implementing the Project on the agreed terms and conditions.

3. Thereafter on 3.1.2002 an agreement for execution of the project was entered into interse by the appellant No.2 Ashoka Buildcon and appellant No.1 Ashoka Infraways and the respondents agreed to the arrangement vide letter dated 16.01.2003 (Annexure A-3). Notifications were duly issued on 24.5.2004 and 29.12.2011 (Annexure A-4 and Annexure A-5). The completion certificate was given to the appellants-petitioners on 14.5.2004 and that prior to this letter the respondent State Government vide letter dated 9.3.2004 (Annexure A-6) additional work in terms of the clause 22.7 of the special condition of contract was awarded to the appellants-petitioners and assessed at amount of Rs.10,26,22,743/- and was approved by the additional works committee on 16.1.2006 and, therefore, the appellants-petitioners were entitled to collect toll tax for extra days of the approved additional work. As it is the appellant was entitled to 77 additional days for collecting the toll tax since a delay of 77 days was caused by respondent No.1 in handing over the land to the appellant. Similarly for early completion of the project vide letter dated 24.1.2006 (Annexure A-8) the petitioners-appellants was awarded additional 103 days and thus the appellants-petitioners claimed that they were entitled to collect toll tax for 4102 days (original 3922 + 77 + 103 = 4102 days). However, the additional works approval committee assessed the number of days in consultation with the respondent No.2 Executive Engineer and awarded only 1211 days against the additional work. The same was approved by the Superintendent Engineer and hence the dispute arose and the appellants-petitioners filed an application unde