National Highways Authority Of ... vs Bridge & Roof Co India Ltd
2010 Latest Caselaw 1499 Del

                                                          UNREPORTABLE

*       IN THE HIGH COURT OF DELHI AT NEW DELHI


                             FAO No.60/2010


                                     Date of Decision: March 17, 2010



        NATIONAL HIGHWAYS AUTHORITY OF INDIA ..... Appellant
                     Through Mr. Rajiv Kapoor, Advocate


                      versus


        BRIDGE & ROOF CO INDIA LTD          ..... Respondent
                      Through Mr. P.C.Markanda, Senior Advocate
                      with Mr. Rajesh Markanda, Advocate


        CORAM:
        HON'BLE MISS JUSTICE REKHA SHARMA

1.      Whether the reporters of local papers may be allowed to see the
        judgment? No
2.      To be referred to the reporter or not? No
3.      Whether the judgment should be reported in the 'Digest'? No

REKHA SHARMA, J. (ORAL)

The appellant and the respondent are Government

Undertakings. Both belong to the same clan and yet are locked in

litigation with each other. Initially, the disputes between them were

referred to the Disputes Review Board (hereinafter referred to as

the DRB). The DRB in its order dated December 24, 2008 has held

that the termination of the contract by the appellant with the

respondent was not in order. It has also held that there was no valid

contract between the two after May 21, 2008 and, therefore, the claim

put up by the respondent for the period beyond May 21, 2008 was not

tenable. It appears that the respondent was not satisfied with the

latter part of the finding of the DRB and, therefore, it invoked the

arbitration clause resulting in the constitution of the Arbitral Tribunal.

One of the disputes which has been raised before the Arbitral

Tribunal, is whether consequent to the termination of the contract by

the appellant, the respondent was entitled to release of its plant,

machinery and equipment. The respondent moved an application

before the Arbitral Tribunal under Section 17 of the Arbitration and

Conciliation Act, 1996 praying for an interim order for the release of

its plant, machinery and equipment held by the appellant. The

Arbitral Tribunal by its order dated May 14, 2009 directed the

appellant to release the same subject to the respondent furnishing an

additional Bank Guarantee of Rs.18 crores. However, by a

subsequent order dated November 13, 2009 the Arbitral Tribunal has

varied its earlier order dated May 14, 2009, in as much as it has

directed the appellant to release the plant, machinery and equipment

without furnishing the bank guarantee of Rs.18 crores. The revised

order has been passed on account of the fact that the appellant is

already having adequate security in the form of Bank Guarantee of

Rs.35 crores from the respondent.

It is submitted by learned counsel for the appellant that the

Arbitral Tribunal could not have passed any order with regard to the

release of plant, machinery and equipment, as it has yet to decide

whether the disputes raised by the respondent are at all arbitral.

According to the counsel, the decision of the DRB had attained finality

and, therefore, the respondent could not have invoked the arbitration

clause.

The question whether the finding of the DRB had attained

finality and in view thereof, the Arbitral Tribunal has no jurisdiction to

adjudicate upon the disputes raised by the respondent, is a matter

which falls within the domain of the Tribunal. The Tribunal itself has

said in the impugned order that it will deal with the said aspect of the

matter at an appropriate stage. In so far as the order of the Tribunal

directing the appellant to release the plant, machinery and equipment

is concerned, it seems to have been passed keeping in view the fact

that the appellant till date has not raised any counter-claim against

the respondent and that a Bank Guarantee of Rs.35 crores furnished

by the respondent is already lying with the appellant. I find no

infirmity in the order so passed by the Arbitral Tribunal. There is no

merit in the appeal. The same is dismissed.

REKHA SHARMA, J.

MARCH 17, 2010 ka