Supreme Court - Daily Orders
National Highway Authority Of India vs M/S. Afcons Infrastructure Limited on 4 May, 2022
Bench: L. Nageswara Rao, B.R. Gavai
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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.8770/2012
NATIONAL HIGHWAY AUTHORITY OF INDIA Appellant(s)
VERSUS
M/S. AFCONS INFRASTRUCTURE LIMITED Respondent(s)
O R D E R
The appellant had invited bids for the 4 laning and rehabilitation of existing 2-lane carriageway of Poonamalle-Kanchipuram Road, Km.13.8 to 70.2 for a length of 56.4 Kms. The respondent submitted its bid on 28.02.2001. Letter of acceptance was issued by the appellant, on 09.04.2001, accepting respondent’s bid for the contract price of Rs.1,64,37,67,899/-. Thereafter, a concession agreement was entered into between the appellant and the respondent on 22.05.2001. At the time of submission of the bid, there was an excise duty exemption for ‘deemed exports’ under the EXIM policy of 1997-2002. The said exemption was withdrawn, by an amendment dated 31.03.2001, w.e.f. 01.04.2001.
Signature Not Verified
The respondent raised certain claims for payment Digitally signed by BALA PARVATHI Date: 2022.05.05 18:15:48 IST Reason: of additional costs including, refund of excise duty paid on account of subsequent legislation. The said claim was referred to Arbitral Tribunal. The Arbitral Tribunal, by an 2 Award dated 18.08.2010, awarded a sum of Rs.8,73,31,118/- towards reimbursement of additional cost incurred on account of Excise duty due to the subsequent change in legislation and a sum of Rs.5,79,00,145/- towards the interest payable on the amount awarded up to the date of the Award. The appellant challenged the Award dated 18.08.2010 by filing an application under Section 34 of the Arbitration and Conciliation Act, 1996 (in short “The Act”). On 05.05.2011, the Learned Single Judge of the Delhi High Court issued notice. Later, it was clarified on 06.09.2011 that notice was issued limited question of limitation. Petition filed under Section 34 of the Act was dismissed by an order dated 06.09.2011. The appellant challenged both orders dated 05.05.2011 and 06.09.2011 by filing an appeal under section 37 of the Act. The Division Bench of the High Court, by the impugned judgment dated 02.07.2012, dismissed the said appeal.
Mr. R.P. Bhatt, learned senior counsel appearing for the appellant, submitted that a perusal of the relevant clauses of the contract would clearly show that the claim made by the respondent is hit by limitation and therefore, could not have been entertained by the Court. He further submitted that the respondent might have been entitled for exemption of excise duty under the EXIM policy 1997-2002 but the said policy was amended w.e.f. 01.04.2001. On 27.03.2001, the date on which the contract was entered into between the parties, the new EXIM policy was in place and 3 the respondent was not entitled to claim exemption of excise duty as per the old policy.
Mr. Manu Sheshadri, learned counsel appearing for the respondent, referred to clauses 13.4 and 13.5 of Instructions to Bidders (ITB) which read as follows:
“13.4 All duties, taxes and other levies payable by the Contractor under the Contract, or for any other causes as of the date 28 days prior to the deadline for submission of bids shall be included in the rates and prices and the total bid price submitted by the bidder and the evaluation and comparison of bids by the Employer shall be made accordingly".
13.5 - The rates and prices quoted by the bidder are subject to adjustments during the performance of the Contract in accordance with the provisions of Clause 70 of the Conditions of Particular Application and subject to submission of such supporting information as may be required under clause 70 of the Conditions of Particular Application."
He took us through the award of the Arbitral Tribunal, which considered Clauses 13.4 and 13.5, to contend that the Tribunal held the respondent’s claim is justified for the following reasons:
“1. The Contractor in his rates and prices shall include all duties, taxes and other levies payable by the Contractor under the Contract.4
2. The cut off date for consideration what are all the duties, taxes and levies that shall be payable by the Contractor is 28 days prior to the deadline for submission of the bids.
3. The corollary for the above said position is that the Contractor in his rates/bids shall not include the duties, taxes and levies which are not to be payable.
4. Similarly, the duties, taxes and levies after 28 days prior to the deadline of the submission of tender need not be taken into consideration.
5. Any duties, taxes and levies after the above said cut off date changed due to the subsequent legislation, the same will be taken care under Clause 70.8 of the Conditions of Particular Applications.” There is no error committed by the High Court in not entertaining a challenge to the Award. This Court in the case of Delhi Airport Metro Express Private Limited v.
Delhi Metro Rail Corporation1, relied on the earlier judgement of Ssanyong Engg. & Construction Co. Ltd. v. NHAI2, to hold that the judicial interference of Courts in matters of arbitral award should be strictly limited to the grounds mentioned in s. 34 of the Act.
After considering the submissions made by Mr. Bhatt and Mr. Sheshadri, we see no reason to interfere with the order passed by the High Court, in the peculiar facts 1 (2022) 1 SCC 131 2 (2019) 15 SCC 131 5 of the present case.
Bank guarantees furnished by the respondent shall be returned within a period of one week from today.
The appeal is, accordingly, dismissed. Pending application(s), if any, shall stand disposed of.
....................J (L. NAGESWARA RAO) ....................J (B.R. GAVAI) NEW DELHI;
4th May, 2022.
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ITEM NO.104 COURT NO.5 SECTION XIV-A
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No(s).8770/2012
NATIONAL HIGHWAY AUTHORITY OF INDIA Appellant(s)
VERSUS
M/S. AFCONS INFRASTRUCTURE LIMITED Respondent(s)
Date : 04-05-2022 This appeal was called on for hearing today. CORAM :
HON'BLE MR. JUSTICE L. NAGESWARA RAO HON'BLE MR. JUSTICE B.R. GAVAI For Appellant(s) Mr. R.P.Bhatt,Sr.Adv.
Ms. Neetica Sharma,Adv.
Mr. Tavinder Sidhu,Adv.
M/S.M.V.Kini & Associates, AOR For Respondent(s) Mr. Manu Seshadri,Adv.
Mr. Abhijit Lal,Adv.
Ms. Pallavi Anand,adv.
Mr. Nikunj Dayal, AOR UPON hearing the counsel the Court made the following O R D E R The appeal is dismissed in terms of the signed order. Pending application(s), if any, shall stand disposed of.
(B.Parvathi) (Anand Prakash)
Court Master Court Master
(Signed order is placed on the file)