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2024 Supreme(Online)(DEL) 11544
HIGH COURT OF DELHI
Prathiba M. Singh, J
NATIONAL HIGHWAYS AUTHORITY OF INDIA – Appellant
Versus
GURUVAYOOR INFRASTRUCTURE PVT. LTD. – Respondent
OMP (ENF.) (COMM.) 97/2024 & EX.APPLs.(OS) 703-707/2024
For the Appellants/Petitioners: Mr. Ankur Mittal, Mr. Abhay Gupta, Ashish Gajwani, Ms. Ikshita Parihar
For the Respondents: Mr. Arjun Syal, Mr. Shreyan Das, Mr. Pranay Chitale, Ms. Smiti Verma
The court reinforced that compliance with arbitration orders and contractual obligations, notably prioritizing negative grant payments over other expenses, is essential to maintain the integrity of the escrow agreement.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 17(2) - Enforcement of arbitral tribunal's orders - National Highways Authority of India sought enforcement of orders directing Guruvayoor Infrastructure Pvt. Ltd. to deposit a negative grant into an escrow account and adhere to the escrow agreement conditions, including the payment structure for the negative grant. (Paras 7-9, 10-14)
(B) Contractual Obligations - The court emphasized that the negative grant payment must take precedence over other expenses and that adherence to the escrow agreement is critical for maintaining the obligations therein. The court ruled that the judgment debtor had failed to make required payments as per the concession agreement and was directed to secure NHAI’s interests against any further unauthorized withdrawals. (Paras 26-34)
Facts of the case:
Guruvayoor Infrastructure Pvt. Ltd. entered into a concession agreement with NHAI for toll collection and is in default of payment amounting to Rs. 200 crores. The court examined the non-compliance with the escrow agreement during arbitration proceedings and emphasized the need for adhering to the tribunal's orders regarding the negative grant.
Findings of Court:
The court ordered the judgment debtor to immediately pay Rs. 50 crores and subsequently Rs. 10 crores monthly while ensuring compliance with the escrow agreement's stipulations.
Issues: The primary issues addressed involved compliance with the escrow agreement and obligations of the judgment debtor regarding the negative grant.
Ratio Decidendi: The court's analysis affirmed that the negative grant payment is prioritized over other financial obligations, mandating strict compliance with the arbitration tribunal's orders and the escrow agreement terms.
Result: Ordered the judgment debtor to secure NHAI’s payments and adhere to escrow regulations.
| Table of Content |
|---|
| 1. exemption applications allowed (Para 2 , 3 , 4 , 5 , 6) |
| 2. background of the concession agreement and obligations (Para 7 , 8 , 9 , 10 , 11) |
| 3. orders of the arbitral tribunal (Para 12 , 13 , 15) |
| 4. nhai's position and judgment debtor's failures (Para 20 , 26 , 29) |
| 5. court's decision and directives (Para 21 , 30 , 33 , 34) |
PRATHIBA M. SINGH Prathiba M. Singh, J.(Oral)
1. This hearing has been done through hybrid mode.
EX.APPL.(OS) 705/2024 (for exemption)
2. This is an application filed by the Decree Holder herein seeking exemption from filing originals/certified/cleared/typed or translated copies of documents, proper margins, electronic documents, etc. Original documents shall be produced/filed at the time of Admission/Denial, if sought, strictly as per the provisions of the Commercial Courts Act and the DHC (Original Side) Rules, 2018.
3. Exemption is allowed, subject to all just exceptions. Accordingly, the application is disposed of.
EX.APPL.(OS) 706/2024 (for exemption)
4. Allowed, subject to all just exceptions. Application is disposed of.
EX.APPL.(OS) 707/2024 (for delay)
5. This is an application for condonation of delay in re-filing. For the reasons stated in the application, the delay is condoned. Application is disposed of.
EX.APPL.(OS) 704/2024 (for additional documents)
6. The additional documents in the form of escrow account statements are permitted to be placed on record with advance copy to ld. Counsel for the Respondent/Judgment Debtor herein. The Respondent is free to rebut the same. Application is disposed of.
OMP (ENF.) (COMM.) 97/2024 & EX.APPL.(OS) 703/2024
7. This is a petition filed on behalf of the Decree Holder herein - National Highways Authority of India (hereinafter, ‘NHAI’) under Section 17 (2) of the Arbitration and Conciliation Act , 1996. Vide the present petition NHAI is inter alia, seeking enforcement of orders dated 11th October, 2022 and 10th May, 2023 passed by the ld. Arbitral Tribunal in ‘Guruvayoor Infrastructure Pvt. Ltd. v. National Highways Authority of India’. Further, NHAI is seeking the following reliefs:
“a) Pass an Order directing the Respondent to deposit and secure the amount of Negative Grant to the extent of Rs. 614,41,01,903/- (as on 31-12-2023) in the sub account of escrow account without any delay;
b) Pass an order directing the respondent to return and bring back the amount of Rs. 246,90,45,130 wrongly taken out of escrow account as detailed in para no. 37 above;
c) Pass an order directing the Respondent to strictly comply with the Interim Order dated 11.10.2022 and Order dated 10.05.2023 passed by the Hon'ble Arbitral Tribunal;
d) Pass an order directing the Respondent to meticulously follow waterfall mechanism under the Escrow Agreement including not to service any debt payments unless and until the provision for negative grant is made in the escrow account.
e) Pass an order directing detention of directors of Respondent to be detained in civil prison for violating the Order passed by the Hon'ble Arbitral Tribunal;
f) Pass an order imposing exemplary costs upon the Respondent for violating the Order passed by the Hon'ble Arbitral Tribunal;
g) Pass such other order or orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the present case;”
8. The background of the present case as stated in the petition is that the Judgment Debtor herein - M/s Guruvayoor Infrastructure Pvt. Ltd. entered into a Concession Agreement dated 27th March, 2006 (hereinafter, ‘Concession Agreement’) with NHAI for a project involving widening of two lane portion from Km 270.000 (Thrissur) to Km. 316.70 (Angamali) section of the National Highway 47 to four lanes and improvement, operation and maintenance of Km. 316. 70 (Angamali) to Km. 342.0 (Edapalli) on National Highway 47 in the State of Kerala (hereinafter, ‘project’)
9. It is the case of NHAI that as per Clause 23 of the Concession Agreement, the Judgment Debtor herein undertook an obligation to provide NHAI a neg
