Delhi High Court
L & T Transportation Infrastructure Ltd vs Ministry Of Shipping Road Transport & ... on 26 March, 2010
Author: Valmiki J. Mehta
Bench: Valmiki J.Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. No.179/2010 & I.A.No. 3948/2010
Date of decision : March 26, 2010
L & T TRANSPORTATION INFRASTRUCTURE LTD
... Petitioner.
Through: Mr.Dr. A.M.Singhvi, Sr. Advocate
with Ms. Shveta Bharti and Ms. Sonia
Patel, Advocates
VERSUS
MINISTRY OF SHIPPING ROAD TRANSPORT & HIGHWAYS
....Respondent
Through:
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
1. Whether the Reporters of local papers may be allowed to see the judgment?
2. To be referred to the Reporter or not?
3. Whether the judgment should be reported in the Digest?
% JUDGMENT(ORAL) VALMIKI J. MEHTA, J
1. By this petition under Section 9 of the Arbitration and Conciliation Act, 1996, the petitioner who is a concessionaire entitled to collect toll for a project OMP-179-2010 Page 1 which for the sake of convenience is called "Coimbatore Bypass" and "Athupalam Bridge" seeks urgent interim relief for status quo for the BOT Project which was completed by it pursuant to the Concession Agreement dated 3rd October, 1997. It is not a disputed fact that the petitioner after completing the BOT Project was collecting toll from the users of the road/bridge since 1998. There are no complaints as against the petitioner with respect to any defalcation during the performance of the contract.
2. Disputes arose between the parties on account of the stand taken by the respondent for terminating the Concession Agreement, which is to be in operation till the year 2029 in case of the Coimbatore Bypass and 2018 in case of Athupalam Bridge, for the reason that there had to be four lanning of the By pass.
3. The respondent has sought to terminate the contract relying on the Force Majeure Clause 16 of the contract with its particular sub-clauses. It seems that after certain parleys, which proved unsuccessful, the respondent terminated the contract by its letter dated 11th May, 2009 relying upon Clause 16.2.3 (ii) of the Concession Agreement. This clause relied upon for termination of the contract reads as under :-
"16.2.3 GOI Political Event
(i) Change in Law adversely and materially affecting toll rights of the Concession Company.
Explanation :- ( a ) the enactment of any new Indian law or Indian Directive;
OMP-179-2010 Page 2
(b) The repeal in whole or in part (unless re-enacted with the same effect), or modification of any existing Indian law or Government Directive;
(c) A change in the interpretation or application of any Indian law or Government Directive such interpretation being legally binding on the parties to this Agreement.
( ii ) expropriation or compulsory acquisition by any Indian Governmental Agency or any State Government Agency of any material assets or rights of the Company.
(iii) ..............."
4. Dr. A.M. Singhvi, learned senior counsel for the petitioner has pressed for an ex-parte ad-interim injunction whereby restraint is sought against the respondent from terminating the contract and physically taking over the project and the toll collection. Two substantive arguments have been urged to show the perversity and illegality in the impugned action of the respondent. The first point is that the Clause 16.2.3 (ii) is ex-facie incapable of being applied to the facts of the case wherein the BOT contract is sought to be cancelled because of increase of traffic in the Bypass and for the North South Corridor. It is contended that the aforesaid Clause 16.2.3 (ii) applies only if there is an expropriation or compulsory acquisition as envisaged in the sub-clause, however, admittedly the respondent is not compulsorily acquiring the project under any statue such as Land Acquisition Act and so on. The second substantive contention of Dr. Singhvi arises from Clauses 6.5 and 6.9 of the contract and as per which clauses, it is contended by Dr. Singhvi, that since the admitted facts as brought forth by the respondent to justify its action, fall actually under these Sub-Clauses 6.5 and 6.9, there is no scope for OMP-179-2010 Page 3 applicability of Clause 16 which only deals with situation of force majeure i.e. a non envisaged eventuality whereas increase of traffic and providing of additional lanes is a an envisaged eventuality by virtue of Clauses 6.5 and 6.9 and also other related Clauses such as 7.2.1 and so on.
5. Dr. Singhvi has further contended that there is no clause of liquidated damages provided in the contract whereby compensation is provided for the actual toll which would be the revenue to the petitioner for the entire period up to 2018 and 2029. It was contended that consequentially the monetary loss in favour of the petitioner cannot be estimated and the petitioner is therefore not barred by the provisions of the Specific Relief Act in claiming the interim relief.
6. I agree with the contentions as raised by Dr. Singhvi especially for the purposes limited to the ground of ex parte injunction because the petitioner after successfully execution of the BOT project has been in possession and control of the project and carrying out the performance thereunder right from 1998 till date. Further the petitioner has taken huge loans which I am informed are presently to the tune approximately Rs.170 crores and if the respondent continues with its threatened action losses which cannot be compensated in monies would be caused to the petitioner, especially because the receivables from the projects are charged to the Banks for repayment in respect of the loans granted.
OMP-179-2010 Page 4
7. In view of the above, for the purposes limited to the grant of ex parte injunction, I am satisfied that the petitioner has a prima facie case and the balance of convenience is in favour of the petitioner who will be caused grave and irreparable injury if the interim orders as prayed for, are not granted. For this purpose, the aspect which tilts the issue in favour of the petitioner is that Dr. Singhvi, on instructions from the Authorized Representative of the petitioner has stated that in case, there has to take place construction of additional lanes with respect to project, the petitioner will meet the bid of the best tenderer with respect to the project of the four laning project. I am also satisfied that in the absence of grant of interim relief, the prayer made by the petitioner would become infructuous.
7. Accordingly, therefore, until further orders unless so varied by the court, the respondent is restrained from in any manner interfering with the operations and maintenance of the BOT project as constructed by the petitioner under the Concession Agreement dated 3.10.1997. The respondent is injuncted from in any manner taking over possession of the project except through the due process of courts and law.
8. Let a notice be issued in the petition on filing of process fee both in the ordinary method as well as by registered AD post, returnable on 13 th April, OMP-179-2010 Page 5 2010. The petitioner to comply with the provisions of Order 39 Rule 3 of CPC definitely by tomorrow i.e. 27.3.2010.
9. Copy of this order be given dasti to counsel for the petitioner under the signatures of the Court Master.
VALMIKI J. MEHTA,
March 26, 2010
ib
OMP-179-2010 Page 6