Delhi High Court
National Highways Authority Of ... vs M/S Progressie - Mvr (Jv) on 18 January, 2017
$~30
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 18.01.2017
+ FAO(OS) 16/2017
NATIONAL HIGHWAYS AUTHORITY OF INDIA (NHAI) .... Petitioner
versus
M/S PROGRESSIE - MVR (JV) ..... Respondents
Advocates who appeared in this case:
For the Petitioners : Mr S. Nanda Kumar with Mr Parivesh Singh & Mr P.
Sriniwasan.
For the Respondent : Dr Amit George & Mr Swaroop George.
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE ASHUTOSH KUMAR
JUDGMENT
BADAR DURREZ AHMED, J (ORAL)
CM No.1911/2017
Allowed subject to all just exceptions.
CM Nos.1912-1913/2017
These applications for condoning the delay in filing and re-filing
have been heard. After considering the arguments of the learned counsel
for the parties, we are of the view that this is a fit case where delay ought
to be condoned.
The applications are allowed.
FAO(OS) 16/2017 & CM No.1910/2017 (Stay)
The present appeal has been preferred against the order dated
17.06.2016 passed by a learned single Judge of this Court in OMP
No.1003/2013 which, in turn, was a petition under Section 34 of the
Arbitration & Conciliation Act, 1996 challenging the award dated
01.06.2013 (pronounced earlier on 09.05.2013). The learned single Judge
has rejected the application under Section 34 of the said Act on the
ground that the subject matter of challenge was entirely covered by a
decision of a learned single Judge on identical issues which was rendered
on 17.12.2014 and the appeal against which was also dismissed by a
Division Bench of this Court by virtue of the judgment dated 10.03.2015
delivered in FAO (OS) 93/2015. The learned single Judge has also noted
that the Special Leave Petition preferred by the appellant (NHAI) being
SLP(C) No.19526/2015 was also dismissed by the Supreme Court by
virtue of the order dated 31.08.2015. It is in this backdrop, since the
matter was entirely covered by the earlier decision, that the learned Single
Judge has rejected the petition under Section 34 of the said Act.
We have heard the learned counsel for the parties. The learned
counsel for the appellant sought to draw a distinction between the issues
decided by this Court in FAO(OS) 93/2015, against which the Special
Leave Petition has also been dismissed, and the issues in the present case.
The distinction that is sought to be drawn by the learned counsel for the
appellant is in connection with the note following sub-para (xi) of sub-
clause 70.3 of the Conditions Of Particular Application (COPA). It has
been submitted that in the earlier decision, the expression used was as
under:-
"(Note: X, Y, Z are the actual percentage of cost of bitumen,
cement and steel respectively used for execution of work as
per the interim payment Certificate for the month.)"
Whereas the note in the present contract is as under:-
"(Note: X, Y, Z are the actual percentage of bitumen, cement and
steel respectively used for execution of work as per the interim
payment Certificate for the month.)"
In the above context, it has been submitted by the learned counsel
for the appellant that the words „of cost‟ appearing in the note in the
earlier case are absent from the note in the present case. According to
him, this makes a material difference. However, we find that this very
aspect was placed before the learned single Judge who has considered the
same and concluded that this would not amount to any material difference
for the reasons that the parties were ad idem in the present case that the
actual percentage of the components X, Y and Z were to be arrived at by
employing the cost or rate of the said elements respectively. Paragraph
28 of the impugned judgment brings out the rival contentions of the
parties and the same is reproduced herein below:-
"28. The stand of the respondent is that while computing the
percentage of the components of X, Y and Z i.e. bitumen,
cement and steel respectively, the percentage has to be
calculated by multiplying the quantities of these items in a
bill for that particular month, with the „current cost‟ or
landed cost of these items in the market. The stand of the
petitioner on the other hand is that while computing the
percentage of the components of X, Y and Z the percentage
has to be calculated by multiplying the quantities of these
items in a bill with their „base cost‟ i.e. the cost prevailing at
the time of submitting the bid."
It is evident that the controversy before the learned single Judge
was once again whether the current cost would be employed or whether it
would be the base rate that would be taken into consideration for arriving
at components X, Y and Z. The conclusions of the learned single Judge
on this aspect are as under:-
"33. It appears form the above that the Arbitral Tribunal has
come to a conclusion that since the „actual percentage‟ was
to be calculated in reference to the „work done‟ for a
„particular month‟, it is the usage of the current cost that is
contemplated by the price adjustment formula in as much as
it is the current cost that would be representative of the work
done in a particular month rather than an alleged base cost of
several months or years prior.
34. The Arbitral Tribunal has also observed that the „Note‟
appended below the price adjustment clause nowhere
stipulates the usage of the base cost, though the petitioner,
being the drafter of the contract, could have explicitly
provided for the same when it drafted the Note. It appears to
the Court that the Arbitral Tribunal has taken a plausible
view; it is to be considered as to whether this can be
interfered with in exercise of the limited jurisdiction under
Section 34 of the Act.
35. In the present case, the petitioner is not able to show any
explicit stipulation in the „Note‟ appended about the price
adjustment clause that it is the base rate which is to be
utilized. Therefore, it cannot be concluded that the Arbitral
Tribunal has construed the contract in unfair manner; it could
be interpreted totally in a different way by a reasonable
person. Therefore, the challenge under Section 34 of the Act
is without any valid basis (Reference was made on behalf of
the respondent to the judgment of the Supreme Court in the
case of National Highways Authority of India v. ITD
Cementation India Limited, 2015(5) SCALE 554)."
It is, therefore, clear that the controversy in the present case also to
whether the „cost‟ at „base rate‟ or the „current cost‟ is to be taken. This
was the very issue which was before the Court in FAO (OS) 93/2015. In
that case the Court clearly held that the current cost was to be taken into
account in determining the components X, Y and Z and not the base rate.
Consequently, we are of the view that the learned single Judge was
absolutely correct in observing that the present matter is entirely covered
by the decision of the Division Bench in FAO(OS) 93/2015 against which
the Special Leave Petition has also been dismissed. The learned single
Judge has also held that the interpretation given by the Arbitral Tribunal
was one of the possible interpretations and therefore there was, in any
event, no question of interfering with that interpretation. Consequently,
there is no merit in this appeal, the same is dismissed. There shall be no
order as to costs.
BADAR DURREZ AHMED, J
ASHUTOSH KUMAR, J
JANUARY 18, 2017/ns
