Supreme Court - Daily Orders
National Highways Authority Of India vs M/S T.K. Toll Road Pvt. Ltd. on 27 September, 2023
CA 6262-6264/2023
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal Nos 6262-6264 of 2023
(Arising out of SLP (C) Nos 21751-21753 of 2023)
National Highways Authority of India Appellant
Versus
M/s T K Toll Road Pvt Ltd Respondent
ORDER
1 Leave granted.
2 A Concession Agreement1 dated 19 July 2007 was entered into between the appellant and the respondent for the design, engineering, finance, construction, operation and maintenance of the Trichy-Karur Section of National Highway 67 in the State of Tamil Nadu. In terms of the CA, both the parties entered into a tripartite State Support Agreement with the Government of Tamil Nadu on 7 August 2008. The period of construction as stipulated in the CA was thirty months with the scheduled date of completion 1 “CA” Signature Not Verified Page 1 of 8 Digitally signed by CHETAN KUMAR Date: 2023.10.04 17:55:40 IST Reason: CA 6262-6264/2023 of 14 July 2010.
3 A Supplementary Agreement2 was entered into on 14 November 2013, in terms of which the revised commercial operation date was fixed at 24 February 2012. A Provisional Completion Certificate for the project was issued on 22 February 2014. The respondent is, in pursuance thereof, collecting the toll until 2038.
4 The respondent issued a letter for the commencement of arbitration on 17 December 2018. The arbitral proceedings took place before a three-member tribunal. The tribunal rendered an award by a majority of 2:1 by which the appellant has been directed to pay an amount of Rs 1056 crores together with interest.
5 The award is the subject matter of a challenge under Section 34 of the Arbitration and Conciliation Act 1996 before the High Court of Delhi. An application was filed under Section 36(2) seeking a stay of the arbitral award. The respondent filed a petition under Section 36 for enforcement of the award. The respondent also filed two applications for a direction to the appellant to deposit the awarded amount.
6 By its impugned order dated 9 August 2023, the High Court rejected the application for stay of the arbitral award and directed the appellant to 2 “SA” Page 2 of 8 CA 6262-6264/2023 deposit the entire amount awarded in two installments. 7 We have heard Mr Narender Hooda, senior counsel for the appellant and Mr Parag P Tripathi, senior counsel for the respondent. 8 On behalf of the appellant, it has been submitted that:
(i) The total project cost was INR 516 crores, out of which an amount of INR 134.26 crores was disbursed by the appellant. In the circumstances, the award of Rs 1056 crores is disproportionate having regard to the fact that the respondent is entitled to collect toll until 2038;
(ii) An SA was entered into between the parties on 14 November 2013 which was followed by a Project Completion Certificate on 24 February 2013. The notice invoking arbitration was issued on 17 December 2018 and hence the claim was ex facie barred by limitation;
(iii) Despite the fact that the parties entered into an SA, the respondent belatedly sought to allege coercion in the execution of the SA for the first time on 20 October 2016; and
(iv) At no stage did the respondent seek to challenge the validity of the SA or seek a declaration in that regard.
9 Certain other submissions have been urged in support of the appeal. These may not be necessary to enquire into in any great detail at this stage since Page 3 of 8 CA 6262-6264/2023 the petition under Section 34 is still to be heard by the High Court. 10 On the other hand, it has been urged on behalf of the respondent that:
(i) The arbitral tribunal has correctly come to the conclusion that since the contract was continuing, the claim would not be barred by limitation;
(ii) The policy of NHAI is that a Project Completion Certificate is not given unless the contractor gives up all its claims and hence, there is merit in the defence of coercion which has been accepted by the arbitral tribunal;
(iii) The arbitral award is liable to be enforced as a money decree and hence, consistent with the provision of Section 36 of the Arbitration and Conciliation Act 1996, the High Court was justified in declining to grant stay of enforcement; and
(iv) The High Court has in these circumstances validly directed the deposit of the entire arbitral award, but has equally made the withdrawal of the amount conditional on the respondent furnishing a bank guarantee.
11 Since the petition under Section 34 of the Arbitration and Conciliation Act 1996 is pending, we are desisting from making any prima facie observations on the merits of the rival contentions in order that the hearing of the arbitration petition can proceed uninfluenced by the impact of any Page 4 of 8 CA 6262-6264/2023 observation made by this Court at the present stage. Equally, it is necessary to note at this stage that the submissions which have been urged on behalf of the appellant cannot be rejected out of hand and would merit closer scrutiny in the course of the proceedings under Section 34. 12 Hence, having regard to the above circumstances, the order of the learned Single Judge directing the deposit of the entire amount of the arbitral award would need to be suitably modified. We accordingly do so in terms of the following order:
(i) The appellant shall on or before 31 October 2023 deposit an amount representing 25% of the awarded amount and furnish a bank guarantee for the balance representing 75% of the arbitral award to the satisfaction of the Registrar (Judicial) of the High Court of Delhi;
(ii) The bank guarantee shall be kept alive during the pendency of the proceedings before the High Court under Section 34 and abide by such directions as may be issued by the High Court at the hearing and final disposal of the petition;
(iii) The respondent would be at liberty to withdraw the amount representing 25% of the awarded amount upon deposit by the appellant subject to furnishing a bank guarantee to the satisfaction of the Registrar (Judicial) of the High Court of Delhi which shall be kept alive Page 5 of 8 CA 6262-6264/2023 during the pendency of the proceedings before the High Court; and
(iv) The parties would be at liberty to move the learned Single Judge of the High Court for expeditious decision of the petition under Section 34.
13 The appeals are accordingly disposed of in the above terms. 14 Pending applications, if any, stand disposed of.
….....…...….......…………………..CJI.
[Dr Dhananjaya Y Chandrachud] ..…....…........……………….…........J. [J B Pardiwala] ..…....…........……………….…........J. [Manoj Misra] New Delhi;
September 27, 2023
CKB
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CA 6262-6264/2023
ITEM NO.26 COURT NO.1 SECTION XIV
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) Nos.21751-21753/2023 (Arising out of impugned final judgment and order dated 09-08-2023 in EX.APPL.(OS) No.345/2023 09-08-2023 in EX.APPL.(OS) No.755/2023 09-08-2023 in IA No.1253/2023 passed by the High Court of Delhi at New Delhi) NATIONAL HIGHWAYS AUTHORITY OF INDIA Petitioner(s) VERSUS M/S T.K. TOLL ROAD PVT. LTD. Respondent(s) (With I.R. and IA No.199394/2023-EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT) Date : 27-09-2023 These petitions were called on for hearing today. CORAM :
HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE J.B. PARDIWALA HON'BLE MR. JUSTICE MANOJ MISRA For Petitioner(s) Mr. Narender Hooda, Sr. Adv.
Mr. Ankur Mittal, AOR Mr. Abhay Gupta, Adv.
Ms. Nidhi Mittal, Adv.
Mr. Subhash Bhatt, Adv.
Ms. Rashi Choudhary, Adv.
Mr. Shaurya Lamba, Adv.
Mr. Raushal Kumar, Adv.
Page 7 of 8 CA 6262-6264/2023 For Respondent(s) Mr. Parag Tripathi, Sr. Adv.
Mr. Hasan Murtaza, AOR Mr. Ankur Kashyap, Adv.
Mr. Sameer Sharma, Adv.
Ms. Aarushi Mishra, Adv.
Mr. Aman Bajaj, Adv.
UPON hearing the counsel the Court made the following O R D E R 1 The appeals are disposed of in terms of the signed order. 2 Pending applications, if any, stand disposed of.
(CHETAN KUMAR) (SAROJ KUMARI GAUR)
A.R.-cum-P.S. Assistant Registrar
(Signed order is placed on the file)
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