O.M.P. (COMM). 127/2021 Page 1 of 18

$~32

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IN THE HIGH COURT OF DELHI AT NEW DELHI

%

+

O.M.P. (COMM) 127/2021 and IA NOS. 4107/2021 &

4106/2021

NATIONAL HIGHWAYS AUTHORITY

OF INDIA

..... Petitioner

Through:

Mr Saurabh Banerjee, Standing

Counsel for NHAI.

Versus

M/S. C.P. RAMA RAO [PROPRIETOR]

..... Respondent

Through:

Mr. Ram Babu, and Mr Angad

Mehta, Advocates.

CORAM:

HON'BLE MR. JUSTICE VIBHU BAKHRU

VIBHU BAKHRU, J. (ORAL)

1.

The petitioner (hereinafter ‘NHAI) has filed the present petition

under Section 34 of the Arbitration and Conciliation Act, 1996

(hereinafter the ‘A&C Act’), inter alia, impugning the Arbitral Award

dated 12.12.2020 (hereinafter the ‘impugned award’) passed by the

Arbitral Tribunal comprising of a Sole Arbitrator.

2.

The impugned award was rendered in respect of disputes that

had arisen between the parties in relation to an agreement dated

30.07.2016 (hereinafter the ‘Contract Agreement’) entered into

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O.M.P. (COMM). 127/2021 Page 2 of 18

between the parties for “Collection of user fee of Vemapadu Fee Plaza

NH-5 in the State of Andhra Pradesh” (hereinafter the ‘project’).

3.

On 17.06.2016, NHAI invited tenders by issuing a Request for

Proposal (RFP) in respect of work relating to collection of User Fee at

Vempadu Toll Plaza located at Km. 795.498 on the stretch extending

from Km. 830.525 to Km. 741.255 on National Highway No.5 (now

renamed as National Highway No.16) in the State of Andhra Pradesh.

4.

On 21.07.2016, the respondent submitted the financial bid for

the aforesaid work. He was declared the highest bidder and NHAI

issued a Letter of Acceptance. Thereafter, on 30.07.2016, the parties

entered into a Contract Agreement, whereby the respondent was

granted the concession for collecting User Fee at Vempadu Toll Plaza

for a period of one year with effect from 08:00:00 hours on

01.08.2016 to 07:59:59 hours on 01.08.2017. In terms of the Contract

Agreement, the respondent was required to pay ₹2,24,40,274/- per

week to NHAI. The said payment was exclusive of any TCS or any

taxes or service charges as applicable.

5.

In terms of Clause 19 of the Contract Agreement, the

respondent was liable to pay penalty at the rate of 0.2% per day for

initial one month delay and at the rate of 0.5% per day for further

delay beyond one month in remittance of the agreed amount. In terms

of Clause 17(b)(i) of the Contract Agreement, the respondent also

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O.M.P. (COMM). 127/2021 Page 3 of 18

furnished the following performance security: (i) cross DD, Pay order

in the sum of ₹ 9,75,09,000/- and (ii) bank guarantee being BG No.

24/2016 dated 30.07.2016 in the sum of ₹9,75,09,000/- issued by

Indian Bank.

6.

The Government of India rolled out the Goods of Services Tax

(GST) with effect from 01.07.2017. The said levy subsumed all

indirect taxes.

7.

The respondent claimed that in view of the uncertainty

surrounding the implementation of GST, there was a rapid decline in

the movement of traffic and it adversely affected the collection of

tolls. The respondent brought this to the notice of NHAI by its letter

dated 05.07.2017.

8.

The respondent informed NHAI that he had incurred a loss of

₹52,62,228/- on account of reduction in collection of tolls for the

period 28.06.2017 to 05.07.2017. According to the respondent, the

said communication was received by the Project Director (PD) and

was submitted to the Regional Office (RO) for assessment. Thereafter,

the respondent sent another letter dated 08.07.2017, tabulating the loss

incurred by him for the period from 28.06.2017 to