L & T Transportation ... vs Ministry Of Shipping Road ...
2010 Latest Caselaw 1715 Del

 *          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