M/S. SOMA ISOLUX NH ONE TOLLWAY PVT.LTD. Vs HARISH KUMAR PURI .
Bench: GYAN SUDHA MISRA,PINAKI CHANDRA GHOSE
Case number: C.A. No.-004611-004611 / 2014
Diary number: 17141 / 2013
Advocates: AP & J CHAMBERS Vs
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REPORTABLE
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4611 OF 2014 (Arising out of SLP (Civil) No. 19379/2013)
M/S. SOMA ISOLUX NH ONE TOLLWAY PRIVATE LIMITED . Appellant
Versus
HARISH KUMAR PURI & ORS. ..Respondents
J U D G M E N T
GYAN SUDHA MISRA, J.
1. Leave granted.
2. This appeal by special leave has been filed
assailing the order dated 27.5.2013 passed by the High
Court of Punjab and Haryana at Chandigarh in C.M.No.
3301/2013 arising out of CWP No. 13848/1998 whereby
certain adverse directions to be related hereinafter were
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issued having grave implication on the contractual rights
of the appellant- M/s. Soma Isolux NH One Tollway Pvt.
Ltd. (hereinafter referred to as ‘the Concessionaire
company’) as it was saddled with a fine of Rs.60 crores
and Rs.7 crores to be paid by the appellant-
Concessionaire Company and its Director respectively
which were to be deposited with the Registrar General of
the High Court within one month of the date of the order.
The respondent No.6 National Highways Authority of India
(shortly referred to as ‘the NHAI’) was further directed to
proceed in the matter forthwith and take possession of
the Highway project and ensure that collection of toll is
deposited in a separate account and the work of repairs
of the highway commenced within a week and the work of
construction of highway commenced and completed
within a month thereafter. The High Court further issued
direction that the entire matter relating to the contract,
the completion of the work of the highway, collection
from tolls without existence of six-lanes be enquired into
and a report in that regard be placed before the High
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Court within three months. It was also made clear that
the enquiry shall not be construed to be an excuse to
delay the construction of the highway. It was further
observed that the Chairman, NHAI shall be personally
responsible for ensuring that the work of six-laning of the
highway between Panipat and Jullunder is completed
within six months failing which the Chairman, NHAI would
be held personally liable to pay fine similar to the terms
imposed on the Concessionaire Company –respondent
No.7. The appellant-Concessionaire Company has,
therefore, come up to this Court challenging the
impugned order passed by the High Court.
3. The substantial questions of law of general and
public importance that emerge for consideration in this
appeal inter alia may be crystallised as follows:
i Whether the directions issued by the High Court
which have far reaching consequences against the
petitioner/appellant and which directions by a judicial fiat,
has the effect of nullifying the terms of the Concession
Agreement dated 09.05.2008 defeating the rights and
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obligations arising therefrom in a Public Interest Litigation
while exercising jurisdiction under Article 226 of the
Constitution of India is an act of judicial overreach under
the garb of public interest?
ii Whether the terms and conditions of a concluded
contract can be nullified by the High Court by issuing
sweeping directions in an ongoing Public Interest
Litigation Petition which renders the terms and conditions
of the Concession Agreement between the contracting
parties redundant at the instance and initiative of the
Court itself when such directions has not even been
sought by any of the parties to the Public Interest
Petition?
iii Whether a Bench of the High Court which is seized of
a particular dispute would be justified in not taking note
of the final judgment and order passed earlier by a co-
ordinate Bench settling the said controversy in view of
which no direction could be issued by the High Court
nullifying the contractual rights of the affected party?
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4. In order to appreciate and adjudicate the
controversy involved and to put the matter in proper
perspective certain factual background may be related
which disclose that this appeal by way of special leave
petition has its genesis in a writ petition bearing CWP No.
13848/1998 which came to be filed in the High Court of
Punjab and Haryana at Chandigarh as a public interest
litigation on 25.7.1998 by the respondent No.1 herein
Harish Kumar Puri whose son had died in a road accident
on 14.5.1996 at Pipli Chowk, Kurukshetra due to the
criminal negligence alleged on the part of the traffic
police posted on the said chowk. In the PIL, the
respondent No.1 Mr. Puri prayed for issuance of a writ in
the nature of mandamus directing for enforcement of
traffic rules and to maintain the signal system, rumble
strips on crossing, first aid units, control over speeding on
G.T. Road National Highway No.1 and a further writ or
direction holding the State functionaries liable for the
criminal negligence on the part of its employees and
saddle it with monetary liability.
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5. Interestingly, this writ petition which was filed as
a PIL with the laudable object of improving management
of traffic on the highway in the interest of the commuters
and the public at large over the years metamorphosed
into a long drawn litigation alleging breach of contractual
obligations between the appellant-concessionaire
company and the respondent No.7 NHAI wherein the
respondent Union of India as also the respondent/PIL
petitioner in the High Court have jumped into the fray
giving rise to several rounds of litigation. In the process it
affected the very purpose and object for which the writ
petition had been filed as also the construction of the
Highway for which a concession agreement had been
executed between the appellant-concessionaire company
and the respondent No.6 NHAI by way of a competitive
bidding process during pendency of the PIL as a step
towards resolving the issue of management of traffic.
6. While tracing out the background of the matter,
bereft of not so essential factual details, it may be
sufficient to state that the Division Bench of the High
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Court issued notice of motion on 1.9.1998 in the writ
petition (PIL) which came up before the High Court for
consideration from time to time spanning over several
years and finally on 11.4.2002, an order was passed by
the High Court on 11.4.2002 for impleading the Secretary
to the Government of India, Ministry of Road Transport
and Highways, New Delhi when the issue camp up
regarding non-opening of the railway bridge near Dera
Bassi for the general public. Several years thereafter,
notice was also issued to the National Highways Authority
of India (NHAI) to appear before the High Court through
its authorized representative as on 9.5.2008 a Concession
Agreement had been executed between NHAI and the
appellant-company since the appellant succeeded in a
competitive bidding process by which it was granted
exclusive rights, license and authority to construct,
operate and maintain its project namely, six-laning of a
part of NH 1 from KM 96.00 to KM 387.100
(approximately 291.10 KM) from Panipat to Jullundur for a
period of 15 years. While awarding the contract, the
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credentials and track record of the appellant was taken
note of which indicated that the appellant M/s Soma
Isolux NH One Tollway Pvt. Ltd. is a joint venture
company with Isolux Corsan Group which is a
multinational company having vast experience of
Infrastructure Development in various part of the world
including Europe, South America, North America and Asia
and has successfully developed Highway Projects in
various countries including Spain, Mexico, Brazil, India
etc. Isolux Corsan Group is the leading European
Investor in infrastructure in India and M/s Soma Enterprise
Ltd. is a renowned Development Construction firm and
has several National Highway Projects in the past 13
years and have completed projects ahead of schedule. It
has also undertaken and completed projects in other
infrastructure sectors like Irrigation Hydro Power and
Railways.
7. The Concession Agreement envisaged reciprocal
obligations from various parties including NHAI, the State
of Haryana and the State of Punjab. Under Clause 4.1.2
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(a) NHAI is/was required to provide right of way and the
appellant-company is/was entitled to demand and collect
appropriate fee commonly known as toll fee from vehicles
and persons liable to pay toll fee for using the national
highway. The Concession Agreement was drafted as per
the model approved by the Planning Commission of India
and the draft concession was in fact circulated with the
RFP (Tender Document) and, therefore, neither the
appellant-company nor the NHAI could have changed the
contents of the agreement pursuant to the award of
contract.
8. In so far as the financing and investment to the
Highway Project is concerned the agreement envisaged
that the appellant-company and the NHAI would be on the
basis of Build, Operate, Trade (BOT) mode which
enumerated that the project being in BOT mode, all
investment in the project will have to be made by the
appellant-company by the income generated from toll
collection and no amount was to be invested/received
from the NHAI. On the contrary, the appellant-company
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as per the Agreement, offered to pay to the
respondent/NHAI premium equal to 20.14 per cent of the
total collection of toll for the first year and this premium
was to be increased by one per cent every subsequent
year. Based on a detailed analysis of the Concession
Agreement, the NHAI thus is not only not funding any part
of the project development cost, it is receiving a
significant portion of the revenue collected as premium
by way of collection of toll. However all the amount
collected by way of toll were to be deposited in the
ESCROW account as a result of which any amount from
this account cannot be withdrawn by the appellant
without signature from the other contracting party i.e.
NHAI. It may further be noted that the agreement
between the appellant and respondent/NHAI
acknowledges and confirms the role of lending
institutions, mainly nationalised banks as a major
significant holder in project implementation. All the
financial agreement dealing in the administration
occurred between lending institutions and the appellant
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and the financial model for the project had been
submitted regarding revenue and approval prior to the
commencement of the project. Agreement entered into
between the appellant/company and the NHAI also
envisages continuous support and co-operation from the
respective State Governments of Punjab and Haryana and
the Concession Agreement as per Article 47.3 requires
the execution of Tripartite State Support Agreement
between NHAI, Concessionaire and respective State
Governments for which support agreements were signed
by the State of Punjab on 11.9.2009 and the State of
Haryana on 16.9.2009. As per the agreement six laning
was to be retrofitted on the existing four-lane as per
standards and specifications which temporarily was to put
the travelling public to some inconvenience. On
8.9.2008, the Division Bench of the High Court which was
seized of the matter passed an order impleading M/s.
Himalayan Expressway Limited as respondent No.7 herein
and on 11.9.2009 the State Support Agreement
mentioned hereinbefore was executed between the
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Governor of the State of Punjab, NHAI and the appellant-
company regarding the obligations of the Government of
Punjab and its continued support for grant of certain
rights and authorities for mobilization of resources by the
appellant-company. The agreement visualizes continuous
support and co-operation of the Government of Punjab.
9. In the meantime, the writ petition/Public Interest
Litigation which was pending in the High Court during
pendency of which the Concession Agreement was
executed, continued to be taken up by the High Court and
various directions came to be passed from time to time
by the High Court in course of hearing of the PIL.
10. The High Court thereafter vide order dated
2.1.2012 on an oral request impleaded the appellant-
company as a party respondent and issued notice to it on
2.1.2012 to ascertain the progress of the Highway
Project. The appellant-company responded to the notice
and sought time to file its reply. Thereafter, on
28.1.2012, an affidavit was filed by the Project Chairman,
NHAI, Ambala before the High Court in the pending PIL
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informing the status of Panipat – Jullundur Section of NH 1
stretch from KM 96.000 to KM 387.100 wherein it was
stated that the Concessionaire-appellant company could
not achieve the milestone –II on the specified date due to
delay in various clearance, tree cutting, utility shifting
etc. and further stated that the scheduled six laning date
has been extended to 15.6.2012. In the meantime and in
response to the notice, the appellant also had filed
affidavit on 12.3.2012 giving details of the progress of the
construction on the highway as also the difficulties and
impediments encountered in the construction.
11. The High Court however refused to consider
even remotely the reasons for the delay in the progress of
the Highway Construction, much less scrutinized it and
further failed to examine or even visualise as to why the
appellant/concessionaire company, which within a period
of three years had constructed 71 % of the highway
project had suddenly slowed down for the rest 29% of the
project. In the process it further refused to consider
whether there were bonafide reasons for the delay on the
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part of the appellant/concessionaire company or the
delay was on account of the impediments created by the
NHAI violating the terms and conditions of the Agreement
as also ignored even the reasoned judicial orders passed
earlier by a co-ordinate Bench of the Punjab and Haryana
High Court itself which had permitted the appellant to
shift the toll plaza in view of the terms and conditions in
the Agreement which were conveniently ignored by the
NHAI contrary to the opinion of its own Independent
Engineer whose opinion in terms of the Agreement was
binding on the NHAI and the same has been upheld by
the High Court by several judgments and orders settling
the controversy. It further failed to take note of the fact
that the High Court itself had stayed the show cause
notice issued by the NHAI to the appellant/company for
terminating the contract and had it not been
stayed/ordered to be kept in abeyance, the cause as to
whether the delay was on the part of the
appellant/company or on account of unreasonable stand
of the NHAI which was contrary to the terms and
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conditions of the Concessionaire Agreement would have
come to the fore. However, the High Court never
addressed itself on these aspects but was pleased to pass
an order on 13.3.2012 inter alia directing the functional
head of the appellant-company as also the Director-
Officer-Incharge of the Project to remain present in Court
on the adjourned date of hearing. The presence of the
Chief General Manager of the NHAI along with the Project
Director was also ordered as it was directed that the
representative of the Concessionaire company as well as
the NHAI will come prepared to respond to all questions
as may be raised by the Court with regard to the
completion of the project within a particular time frame
and shall also come ready to execute the necessary
undertakings before the Court for completion of the
project with the time schedule.
12. The matter was thereafter listed before the High
Court on 22.3.2012 wherein it was submitted that the
Haryana Section of the Six Lane Highway was expected to
be complete by December 2012 and the Punjab Section
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was expected to be complete by March 2013. The High
Court however failed to scrutinise the cause of delay and
refused to take into consideration the terms of the
Concession Agreement under which the respondent No.6
NHAI was under the contractual obligation to grant
approval to shifting of Toll Plazas, straightaway perhaps
on an overall impression observed that there has been
inordinate delay in conducting the project and hence
directed the appellant-company to submit an undertaking
before the Court for completion of the project as per the
schedule mentioned by the appellant No.2 before the
High Court in the form of an affidavit.
13. In compliance to the same, a detailed affidavit
further was filed by the appellant No.2 on behalf of the
appellant-company wherein it was submitted inter alia
that there were certain bottlenecks existing between the
appellant/company and the respondent NHAI in regard to
contractual violations which were adversely affecting the
efforts of the appellant/Concessionaire company in
achieving the project completion. However, it was added
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that the Concessionaire-company shall be making all out
efforts to complete the project highway within 12 months
from the date of clearance of all obstructions that
currently existed between the appellant and the NHAI.
The High Court, however, directed the appellant to file a
clarificatory affidavit by 2 o’clock on the same date which
was submitted in the Court.
14. However, in order to check the authenticity of
the difficulties expressed by the appellant, the High Court
thought it appropriate to get it verified by directing the
parties to hold a joint meeting of the
appellant/Concessionaire company and the
respondent/NHAI and any other authority that may be
involved and steps be taken to remove the obstructions
and difficulties in completing the construction of the
highway if that were found to be actually existing. It was
also directed that a report in this regard including such
steps as may be taken for completing the project be
submitted before the High Court.
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15. In pursuance to the order passed by the High
Court, a meeting was held on 12.4.2012 under the
Chairmanship of Secretary to the Government of Punjab,
Department of Public Works (B & R) between the
appellant-company represented by the appellant No.2
and other officers of the appellant-company and various
officials including that of the NHAI. Another meeting also
took place on 14.4.2012 between the officers of the State
of Haryana, the officers of the appellant-company and
various officials including that of the NHAI. An affidavit
was, thereafter, filed by the Director of appellant-
company on behalf of the appellant-company to complete
the project obviously anticipating that the
respondent/NHAI will remove the impediments which was
coming in the way of completing the project which was
also the contractual obligation of the respondent NHAI.
16. The Division Bench of the High Court however,
did not feel convinced and satisfied, hence passed an
order on 19.4.2012 wherein it observed that the
appellant-company is not serious about the undertaking
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given to the Court and that it entertained serious doubts
with regard to sincerity of the appellant-company to
complete the work within the time frame undertaken. The
High Court, therefore, directed that in the event of work
not completed on schedule which was December 2012
and March 2013 which were the dates furnished by the
appellant-company to complete the project before the
Court, it would be liable to pay a sum of Rs. 50 crores by
way of penalty and its Director Shri Patri Ramachandra
Rao who was responsible for running the day-to-day
affairs of the company would be personally liable to the
extent of Rs. 5 crores. The High Court further observed
that the Concession Agreement appears to be one sided
in its application i.e. in favour of the Concessionaire and
contrary to public interest ignoring the fact that the terms
and conditions of the agreement were in consonance with
the guidelines of the Planning Commission which had
been approved by the Government of India. The High
Court thereafter directed that the matter be listed after
two months for further monitoring.
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17. The appellant in the meantime preferred a
Special Leave petition (Civil) No. CC 8974/2012 before
this Court on 3.5.2012 which was later dismissed as
subsequent development had taken place in the High
Court itself. Thereafter, the Division Bench of the High
Court on 6.7.2012 modified the order dated 19.4.2012
and increased the penalty to be paid by the appellant-
company to Rs. 60 crores and the personal liability of the
Director of the appellant No.1 company to Rs. 7 crores in
case the project was not completed within the time
granted by the Court on 19.4.2012.
18. On 3.8.2012 when the matter was further listed
before the High Court, the counsel for the appellant-
company informed the Court that the NHAI had issued a
show cause notice to the appellant as to why the contract
be not terminated. The High Court, however, passed an
order that the operation of the show cause notice issued
by the NHAI be kept in abeyance till further orders. In the
said order, the High Court also directed the Ministry of
Defence, Government of India to pass an appropriate
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order regarding the land needed for widening of NH 1
falling within the area of Jullundur Cantt. in the State of
Punjab and granted 15 days time to the authorities
concerned to do the needful. The High Court vide Order
dated 24.8.2012 also directed the Ministry of Defence,
Government of India to hand over the land for widening of
the National Highway forming part of the Concession
Agreement against which the Ministry of Defence
approached this Court by filing a Special Leave Petition
bearing No. 26544-26545/2012 which however were
dismissed vide Order dated 5.9.2012 granting further six
weeks time to the authorities concerned to comply with
the orders and directions issued by the High Court. The
Ministry of Defence, Government of India, thereafter
handed over the land for the project to the appellant in
October 2012 after dismissal of the special leave petitions
before the Supreme Court on 5.9.2012. According to the
appellant’s plea the work at the said defence land could
not commence due to utility shifting, boundary wall
shifting in 4 kms. of length.
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19. In order to explain and highlight the
impediments faced by the appellant-company seeking
extension of time to fufill its undertaking, the
appellant/company filed an application bearing C.M. No.
14936/2012 in the pending writ petition in the High Court
of Punjab and Haryana at Chandigarh which is pending
disposal. It was stated therein that the
appellant/concessionaire company was making every
effort to complete the six laning works at the earliest
provided there was complete co-operation by all
concerned and work was not hampered for any reason
beyond the control of the concessionaire as the
agreement itself envisaged continuous support and co-
operation from the respective State Governments of
Punjab and Haryana and the Concession Agreement as
per Article 47.3.
20. The appellant in its application came up with a
case that the highway in question commenced on
11.5.2009 which was the appointed date and the
appellant has been diligently proceeding with the work
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upon declaration of the appointed date by the
respondent. However, the project work were adversely
affected on account of several impediments, delays,
which according to the appellant are solely attributable to
the respondent NHAI. The appellant company submitted
that it has been carrying on its obligation under the
existing Concession Agreement towards construction of
the aforesaid six lane highway earnestly in a professional
manner and to the best of its ability and in spite of the
impediments and difficulties, obstructions and
hindrances, the appellant-Concessionaire till date has
completed 71.06 per cent of the work in the project
highway as on May 2013. However, due to certain
circumstances beyond the control of the appellant-
company, the project was getting delayed. The appellant
while explaining the delay, stated that in spite of
extremely adverse site conditions since commencement
of the project, it has managed to complete substantial
portions of the project highway because of its well
preparedness and adequate mobilization of resources. It
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has been submitted on behalf of the appellant that the
appellant-Concessionaire is fully geared up for the
completion of the project provided the two main
impediments/obstacles namely the stringent conditions of
mining in the States of Punjab and Haryana and the
shifting of Toll Plaza which was hampering the only
source of revenue for the Concessionaire were resolved
which were the main reasons for non-completion of the
project highway. Thus, it had been submitted that the
flow of work in the project highway had been
hindered/slowed down due to various reasons beyond the
control of the appellant-company which was primarily
attributable to the NHAI.
21. Since the High Court by its impugned judgment
and order has permitted the NHAI to take away the
project from the appellant due to slow progress of the
National Highway Project and has also imposed heavy
fine on the company for violating its undertaking in
completing the project, the appellant has sought to
explain the reasons in detail for the alleged slowing down
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of the project. It has been stated that one of the major
constraints that the appellant faced and which vitally
affected the normal flow of work of the project in question
was and is the non-availability of an essential raw
material, namely, stone aggregate in the States of Punjab
and Haryana due to the stringent conditions of mining of
the said material in Haryana with effect from 1.3.2010
and in Punjab with effect from January 2011. However, in
course of arguments the plea regarding non-availability of
supply of raw material, namely, stone aggregate was not
seriously pressed as it was submitted that the appellant
would try to sort it out and avail the material from the
adjoining states.
22. What has seriously been contested and is the
core contentious issue between the appellant and the
respondent-NHAI, which is hindering the completion work
of the project highway is non-relocation of the Toll Plazas
by the NHAI at two locations at KM 110 and KM 211 at
Karnal and Ambala for which the appellant-
Concessionaire had approached the appropriate authority
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ever since March 2010 which is hampering the only
source of revenue for the appellant-Concessionaire
Company. It has been explained that as per the policy of
NHAI (referred to hereinbefore) approved by the Planning
Commission and as per the Concession Agreement
entered into between the parties, tolling is allowed during
the construction of the project from four laning to six
laning. Article 3 of the Concession Agreement which
grants the Concessionaire by virtue of Article 3.1.2. (d)
entitled the Concessionaire to demand, collect
appropriate fee from vehicles and persons liable for
payment of fee for using the project highway or any part
thereof or refuse entry of any vehicle if the fee due/toll
fee is not paid. Internal accruals from the tolls during
construction are part of the financing package agreed
with the lenders and critical to enable financing for the
project as already recorded hereinbefore.
23. On the question of relocation of toll plaza, it has
been submitted that the Concession Agreement allows
the appellant company to choose the location of Toll
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Plazas in consultation with the Independent Engineer and
the authority as per the explicit provisions in this regard
agreed between the parties in the Concession Agreement.
In this context, attention of this Court has been invited to
clause 2.1 of Schedule ‘C’ and Article 48 of the
Concession Agreement which reads as follows:-
Clause 2.1 of Schedule ‘C’
“Toll Plaza means the structure and barriers erected on the project Highway for the purpose of regulating the entry and exist of vehicles in accordance with the provisions of this Agreement and shall include all land, buildings, equipment and other facilities required in accordance with or incidental to the provisions of this Agreement; situated at locations to be decided by the Concessionaire as per Schedule D in consultation with NHAI and IE”. The tentative locations of the Toll Plazas are given in Appendix-I.”
Article 48 defines Toll Plaza as
“the structure and barriers erected of the project highway for the purpose of regulating the entry and exit of vehicles in accordance with the provisions of this Agreement and shall include all land, buildings, equipment and other facilities required in accordance with or incidental to the provisions of this Agreement; provided that such toll plazas shall not be erected within a distance of 20 km and 10 km from the notified urban of Karnal, Ambala, Ludhiyana, Jalandhar cities and
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Gharonda, Nilokhere, Kurushetra, Shahabad, Rajpura, Sirhind Mandi Govindgarh, Khanna, Doraha, Sahniwal, Pillore, Goraya, Phagwara towns respectively as notified on the date of this Agreement and shall be situated at locations to be decided by the Concessionaire in consultation with the Independent Engineer.”
24. Placing heavy reliance on the aforesaid clause of
the Concession Agreement, learned Senior Counsel Dr.
Abhishek M. Singhvi has submitted on behalf of the
appellant-Concessionaire that it has the exclusive right in
accordance with the provisions of the Concession
Agreement to choose the location of Toll Plazas in
consultation with the Independent Engineer and NHAI. It
was, therefore, submitted that the existing Toll Plazas at
KM 146 and KM 212 were proposed to be shifted to KM
110 and KM 182 with the 3rd Toll Plaza at KM 328 retained
at the existing location in view of the contractual rights of
the appellant to fix the Toll Plaza location and
recommendations of Independent Engineer for relocation
of the existing Toll Plaza at KM 146 and KM 212 to KM 110
and KM 211 respectively vide letter dated 9.11.2010
issued by the Ministry of Road Transport and Highways to
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the Regional Officer (Punjab and Haryana), National
Highways Authority of India, the appellant started the
construction of Toll Plazas and subsequently the Haryana
Government on 4.7.2011 put forward the requirement to
shift the Toll Plaza from the approved location at KM 182
to KM 211 in consultation with the respondent. It has
further been stated that based on the discussion between
the Haryana Government and the respondent on the
issue, the respondent sought consent of the appellant
regarding proposal of the Haryana Government for
shifting of Toll Plaza to KM 211 in lieu of the Toll Plaza at
KM 182 for which the in principal approval was granted
earlier.
25. In order to honour the proposal of Haryana
Government and keeping in view the national interest and
public utility of the project, the appellant agreed to follow
the proposal of Haryana Government to relocate the Toll
Plaza at KM 211 instead of KM 182. The appellant
reserved its rights regarding the shifting of Toll Plaza as
per the provisions of the Concession Agreement while
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communicating its willingness to follow the proposal of
Haryana Government as suggested by the respondent.
Subsequently, the respondent NHAI gave approval for
relocation of Toll from KM 213 to KM 211.550 to 212.250
on the basis of recommendation of the Independent
Engineer, consent of appellant and the Government of
Haryana vide its letter dated 11.10.2011.
26. The aforesaid order of shifting of Toll Plaza gave
rise to further litigation as a fresh spate of public interest
litigations were filed in November 2011 in the High Court
of Punjab and Haryana against the relocations of Toll
Plazas since a writ petition bearing CWP No. 21332/2011
(Gram Panchayat Dangdehri & Ors. vs. Union of India &
Ors.) was filed against the relocation of Toll Plaza KM 110
but the same was dismissed by the High Court of Punjab
and Haryana vide order dated 25.1.2012 wherein it was
held as follows:
“Moreover, shifting of Toll Plaza from the present location to the proposed location seems to be bona fide in view of the fact that at the present location flyover has to be constructed to ease the traffic flow within stipulated time as per the agreement. Development and construction of
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National Highway should not be stopped for the simple reason that some of the residents shall face inconvenience or shall be burdened with toll fee.”
The High Court further held:
“the NHAI and Concessionaire while choosing the site for installation of Toll tax have to consider viability, availability of space/location including financial aspect …………….Therefore, action / decision to shift Toll Plaza within 1.5 KM from Ambala Muncipal Limit does not seem to be unjustified, arbitrary or in violation of Rules 2008………………… shifting of Toll Plaza is necessitated to facilitate construction of flyover at the present site.”
27. Another writ petition being CWP No. 23971/2011
(Vishal Nagrath & Ors. Vs. Union of India & Ors.) had also
been filed challenging the relocation of Toll Plaza at 211
KM – 212 KM but the same was dismissed by the High
Court of Punjab and Haryana vide order dated 1.5.2012
wherein another Bench of the High Court had also not
found any infirmity in the decision of the respondents
(appellant herein and NHAI) to relocate the Toll Plaza and
they were held to be well within their right to evaluate the
location of the Toll Plaza considering the fact that they
were being located with reference to the entire project of
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291 KM and the requirement was to have only three Toll
Plazas which had to be so located that they did not result
in a situation of peristalsis movement of the traffic or
even create bottlenecks. The Court went on to hold that
such decisions were to be left to the wisdom of the
agencies involved in the execution of the project and
merely because another location may be perceived to be
the better one, cannot be a ground to warrant judicial
interference.
28. The PIL petitioners challenged this order of the
single Judge by filing a Letters Patent Appeal bearing LPA
No. 170/2012 but this was also dismissed by the High
Court of Punjab and Haryana vide order dated 6.12.2012.
While dismissing the appeal, the learned Judges of the
Division Bench had clearly held which is extracted
hereinunder:
“The argument that the shifting of the toll plaza is actuated with arbitrariness or mala fide is also to be rejected. Learned Single Judge, in this behalf has remarked, and rightly so, that the shifting of toll plaza to the present location seems to be bonafide in view of the fact that at the present location fly over has to be constructed to ease the traffic flow within stipulated time as
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per the agreement and development and construction of National Highway should not be stopped for the simple reason that some of the residents shall face inconvenience or shall be burdened with toll fee.
Before we close, we would also like to point out the submission of learned senior counsel for the National Highway Authority of India as well as the Concessionaire to the effect that in so far as the local residents are concerned, they would have to pay the toll at much lesser rate, which is projected at Rs. 150/- per month per vehicle.
Normally, the choosing of location of Toll Plaza is to be left to the parties concerned. When in the present case, two States as well as government undertaking like the National Highway Authority of India are involved in the decision making process and they have considered financial aspects, the Courts are ill equipped to go into the rationale of such decisions. After it is found that the decision is bonafide; it does not suffer from any oblique motive; and it is not in violation of any statutory provisions, no further judicial scrutiny on the merits of such a decision is admissible in law.
We, therefore, do not find any merit in this appeal which is accordingly dismissed.”
The judgment and order passed in the LPA was thereafter
never challenged either by the PIL petitioner or the
respondent NHAI or the respondent-Harish Kumar Puri
and this judgment and order passed in the LPA thus
attained finality.
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29. However, despite the orders passed by the High
Court of Punjab and Haryana and approval granted by the
respondent NHAI, the appellant has been prevented from
commencing tolling at located Toll Plaza at 211 KM and
110 KM due to which it is contended that the appellant is
gravely affected and is losing substantial fund due to non-
commencing of tolling at the located Toll Plazas that
could have been utilized for the construction of the
project. It has been urged that the NHAI has all along
been consistently stating that the Toll Plaza relocation is
as per the Concession Agreement. Based on this
assurance, the lenders have continued disbursement to
the project. Thus, the respondent by granting of approval
and re-affirming the appellant Concessionaire right to
relocate the Plazas, has induced the appellant and
lenders to invest in construction of the project but the
NHAI has now reversed its decision after 2 ½ years in
spite of giving the in principal approval.
30. It has been submitted by Dr. Singhvi that the
above change in stand of the respondent on the Toll Plaza
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relocation and disallowing the appellant-Concessionaire’s
rights under the Concession Agreement has a material
adverse affect on the concession as the entire investment
on the project was based on its right to enforce the
provision for shifting the Toll Plazas i.e. fixing the Toll
Plaza location to have optimum toll collection as
envisaged in its financial model. As a result, the lenders
have stated that they cannot continue disbursing to the
project without the appellant being allowed to collect toll
from the new locations.
31. It appears that the appellant although had
succeeded in the High Court of Punjab and Haryana on
the dispute regarding shifting of Toll Plaza, the appellant
approached the High Court of Delhi in view of Clause 47.1
of the Concession Agreement under Section 9 of the
Arbitration and Conciliation Act, 1996 by filing OMP No.
321/2013 which is pending disposal before the Delhi High
Court wherein the appellant inter alia has raised several
issues before the High Court of Delhi including the issues
of mining as well as the relocation of the Toll Plaza. It was
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informed that OMP No. 321/2013 is still pending
consideration before the High Court of Delhi but the fact
remains that the issue/dispute regarding shifting of Toll
Plaza had already been set at rest by the High Court of
Punjab and Haryana as already related hereinbefore.
32. However, the High Court in its impugned order
manifestly appears to have ignored or failed to take
notice of the orders by which the High Court vide CWP No.
21332/2011 and CW No. 23971 of 2011 and LPA No.
170/2012 had permitted vide order dated 6.12.2012 to
shift the Toll Paza and completion of the highway project
entrusted to the appellant vide Concessionaire
Agreement which had been approved by the NHAI itself
vide letter dated 30.6.2010.
33. However, the NHAI which had approved the
shifting of Toll Plazas all through suddenly took a U turn
after 2 ½ years when a new Chairman of the NHAI took
over the charge on 18.3.2013 and started questioning the
decision of the NHAI for the first time which had been
approved by an independent Engineer Louis Berger
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permitting shifting of Toll Plazas earlier by the NHAI
stating that it was an error and a malafide decision of
some of the officers of the NHAI oblivious of the fact that
the same had already been upheld by the High Court
after contest when the PIL filed against the shifting of toll
plaza had been rejected by the High Court upto the
Division Bench against which no appeal was preferred
either by the NHAI or any other party. In fact, at the
initial stage, the counsel representing the NHAI had
submitted that shifting of Toll Plazas is contrary to the
Concession Agreement but the same could not withstand
the express clause in the Concession Agreement which
permitted such shifting with the approval of the NHAI and
Independent engineer who under the agreement was
competent to approve or disapprove the shifting.
Confronted with the glaring contradiction, the then
counsel representing the NHAI went on to advance other
arguments which were never raised before the High Court
at any point of time earlier.
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34. Contesting the plea of the appellant and
supporting the directions issued by the High Court in its
impugned order, Ms. Indu Malhotra, learned senior
counsel appearing for the respondent NHAI at a much
later stage submitted that the appellant was required to
complete the project of six laning of National Highway
No.1 by November 2011 under the Concession
Agreement. But even though two years have already
elapsed since the period stipulated in the Concession
Agreement got over, the progress of the National
Highway project has been negligible since January 2012.
It is alleged that the appellant, in fact, is not carrying out
any work whatsoever since November 2012. It was
submitted that several opportunities had been granted to
the appellant to complete the project within the period
stipulated and several extensions were also granted up to
31.3.2013. Despite this, appellant has failed to complete
the project. It was elaborated that the appellant has
practically suspended work on the National Highway ever
since November 2012 even though toll is being collected
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from the commuting public since 11.5.2009 which is the
appointed date. The NHAI in support of its bona fide has
urged that it is primarily concerned with completion of the
project highway in the interest of safety and security of
the public at large, but the appellant having put the
project on hold by not doing any progress in completing
the construction of the highway, the respondent-NHAI
should be allowed to substitute the Concessionaire as per
the provisions of the Concession Agreement. It has been
further urged that the appellant has been flouting the
undertaking given to the Punjab and Haryana High Court
and thus the impugned order passed by the High Court
should not be interfered with.
35. On the most contentious issue regarding
shifting, relocation of the Toll Plaza, it has been submitted
that there is no provision in the Concession Agreement
for shifting/relocation of the Toll Plazas from the pre-
determined locations set out in the bid documents.
Similarly, it has also been submitted that Clause 48.1 of
the Concession Agreement put forth by the appellant that
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it has an unfettered right to decide locations of Toll Plaza
at any three places over a stretch of 291 KM of National
Highway No.1 in complete disregard to the locations
mentioned in Appendix I of Schedule ‘C’ to the
Concession Agreement is wholly untenable, misconceived
and is contrary to the provisions and the overall scheme
of the Concession Agreement. Such interpretation, if
accepted, would not only alter the basic structure of the
Concession Agreement but also would subvert the bid
process. It was further added that changing the bid
parameters subsequent to the award of the project, is not
only against the public policy, but also unjust to the other
unsuccessful bidders and would amount to unjust
enrichment of the concessionaire at the cost of local
public which is not liable to pay such user fee as per the
original scheme of the Concession Agreement.
36. It was still further contended on behalf of the
respondent-NHAI that the appellant also made an attempt
to read Clause 48.1 of the Concession Agreement in
isolation and in complete disregard to its schedules and
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annexures, but the provisions of the contract are to be
read as a whole and not in isolation. Hence if the
definitions of Toll Plaza in Clause 48.1 of the Concession
Agreement and Clause 2.1 of Schedule ‘C’ are to be read
together, it broadly covers three aspects. Firstly, the Toll
Plazas shall not be erected at a distance of 20 KMs and 10
KMs from the notified urban limits of the respective towns
as stated therein. Secondly, the Toll Plazas should be
situated at locations to be decided by the Concessionaire
in consultation with NHAI and Independent Engineer and
thirdly the tentative locations of the Toll Plazas which are
given in Appendix I. Elaborating on this aspect, it was
urged that the locations of Toll Plazas were clarified to
bidders and the ambiguity, if any, in the locations of the
Toll Plaza as per the word “Tentative” mentioned in
Appendix I of Schedule ‘C’ stood frozen permanently
beyond all doubts in view of the reply given to the pre-bid
query. It is an admitted position that the schedules and
annexures to the Concession Agreement forms on
integral part of the Concession Agreement and would be
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in full force and effect as expressly set out in the body of
the Concession Agreement. Relying on this provision, it
was submitted that the limited discretion of the appellant
to decide the locations in view of the words “Locations to
be decided by the Concessionaire” in Clause 48.1, Clause
2.1 of Schedule ‘C’ and mentioning of word “Tentative” in
Appendix I of the Schedule ‘C’ was only to overcome any
unforeseen site constraints at the time of actual
construction of Toll Plaza. The discretion available was
only to marginally modify the location of the Toll Plazas
with the approval of Independent Engineer and NHAI. The
said discretion cannot be appended so as to apply to a
situation where the appellant is permitted to shift the
location of a Toll Plaza from the pre-determined locations
as per Appendix I of Schedule ‘C’ of the Concession
Agreement and further clarified in the reply to the pre-bid
meeting, to another point that too at a distance of 36 KMs
so that the appellant can mop up extra revenue. Adding
further, it was contended that in view of Clause 48.1 of
the Concession Agreement, Toll Plaza should not be
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relocated within 20 KMs and 10 KMs from the notified
urban limits of the respective cities mentioned therein.
Admittedly, the proposed location of Toll Plaza at KM 110
falls within a distance of 10 KMs of Municipal Limits of
Gharonda and within 20 KMs of Municipal Limits of Karnal
as well as of Panipat. In view thereof the relocation of
Toll Plaza at KM 110 as set up by the appellant, if
permitted, would be in complete violation of the
definition of ‘Toll Plaza’ given in Clause 48.1 and the
same should not be permitted as that would amount to
changing the terms agreed into between the parties.
37. Extensive arguments were further advanced on
the point of shifting the location of Toll Plaza and it was
contended that locations of Toll Plaza were determined
even prior to invitation of the tender and approved by the
Cabinet Committee on Economic Affairs. The locations of
the Toll Plaza were identified as early as at the time of
preparation of the feasibility report of the project and on
submission of the feasibility report to the Ministry of Road
Transport and Highways took transfer of the project from
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the Public Private Partnership Appraisal Committee and
subsequent thereto the project was approved by the
Cabinet Committee on Economic Affairs. It is only then
the bids for the project were invited with the pre-
determined locations of Toll Plazas specifically mentioned
in the bid documents. Thus, locations of Toll Plaza were
approved by the Government of India keeping in view the
various factors involved including the total project costs
of the project. In view thereof, the locations of the Toll
Plaza were final right from inception and are part of
statutory approval. In view of this, it was submitted that
shifting of the Toll Plaza would completely change the
bidding parameter and the total project costs, on the
basis of which bids were invited from various bidders. In
support of this, counsel relied upon a decision of this
Court in Monarch Infrastructure (P) Ltd. Vs.
Commissioner, Ulhasnagar Municipal Corporation,
reported in (2000) 5 SCC 287 and submitted that this
Court ( Supreme Court ) upheld the view that if a term of
the tender is delayed after the players have entered into
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arena, it is like change the rules of the game after it had
begun, which would be patently unfair to the other
candidates participating in the tender process.
38. Learned counsel also submitted that the
proposal seeking relocation of Toll Plazas was three times
rejected by the Independent Engineer before its
conditional recommendation leading up to the grant of
conditional in principal approval. Giving out the details in
this regard, it was pointed out that a proposal seeking
relocation of the existing Toll Plazas was received by the
Independent Engineer from the appellant vide letter
dated 11.3.2010. The proposal of the appellant was
rejected by the Independent Engineer vide its letter dated
18.3.2013, 2.4.2010 and 29.5.2010 as the Independent
Engineer found the said proposal to be contrary to the
provisions of the Concession Agreement. The
Independent Engineer was of considered opinion that the
relocation of Toll Plaza would amount to change in the
scope of work. The Independent Engineer had rejected
the proposal of the Concessionaire on the basis that these
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proposed locations contradicted the provisions of
definition of Toll Plaza and Concession Agreement.
Therefore, the Independent Engineer observed that he
could not decide against the provision of Concession
Agreement.
39. Learned counsel representing the NHAI although
related the past history in great detail regarding denial of
permission to shift the Toll Plazas, it could finally notice
that the Independent Engineer vide his letter dated
30.6.2010 expressed that it is not in disagreement with
the shifting of Karnal Toll Plaza although it noted that the
same would amount to change in scope in view of the
provisions of the Concession Agreement. But, thereafter
the Independent Engineer vide its letter dated 10.07.2010
finally “opined that the shifting of location of the Toll
Plaza may be allowed subject to approval of the
competent authority keeping in view the various clauses
of the Concession Agreement and the Gazette Notification
issued by the Government of India.” Counsel for the NHAI
however has still harped upon the previous background
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wherein the Independent Engineer had initially expressed
some reservations for shifting the Toll Plaza ignoring that
after all opinion and counter opinion on the question of
shifting of Toll Plaza, the Independent Engineer finally
gave approval for shifting of the Toll Plaza vide letter
dated 30.6.2010.
40. However, the same could not be made effective
as approval of the Independent Engineer to shift the Toll
Plaza gave rise to at least two public interest litigations
referred to hereinbefore challenging the shifting of Toll
Plaza whereby the High Court approved of the single
Bench order permitting shifting of Toll Plaza as the
Division Bench had dismissed the LPA upholding the order
of the single Bench allowing shifting the Toll Plaza in view
of the clause in the Concession Agreement and the
opinion of the Independent Engineer and the NHAI.
Neither the NHAI nor the PIL petitioners challenged the
judgment and order of the High Court permitting to shift
the Toll Plaza. One would have inferred that as a matter
of judicial propriety ingrained in the principle of
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constructive res judicata and above all rule of law, the
controversy regarding shifting of Toll Plaza attained
finality in view of final adjudication of the dispute
regarding shifting of Toll Plaza by the High Court of
Punjab and Haryana but it is rather strange and beyond
comprehension in view of the principle of constructive res
judicata that the dispute regarding shifting of Toll Plaza
was still allowed to survive as the appellant filed another
writ petition in the High Court of Delhi seeking a writ of
mandamus or any other appropriate direction permitting
it to shift the Toll Plaza which writ petition finally was
dismissed and rightly so as in any case the same could
not have been held maintainable. It is equally interesting
to note that in spite of all this exercise undertaken
regarding the dispute pertaining to shifting of Toll Plaza,
an application was filed under Section 9 of the Arbitration
and Conciliation Act 1996 for appointment of an Arbitrator
to resolve several disputes including shifting of Toll Plaza
missing out that the dispute relating to shifting of Toll
Plaza had already been dealt with on the judicial side by
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the High Court of Punjab and Haryana when two writ
petitions and one LPA against shifting was rejected by the
Division Bench of the High Court and yet the NHAI and
the appellant/company has been litigating and contesting
the plea regarding shifting of Toll Plaza.
41. In fact, we have noticed that it is only in the year
2013 i.e. 18.3.2013 when a new incumbent took over the
charge as Chairman of the NHAI that a letter dated
18.3.2013 was issued wherein the proposal of the
appellant for relocation of Toll Plaza was finally rejected
stating therein that the in principle approval dated
9.11.2010 by NHAI was only conditional in nature and at
the most were only recommendatory vide its letter dated
9.11.2010 ignoring that the Independent Engineer, earlier
had approved of the proposal for shifting the Toll Plaza.
In spite of these, the application is still surviving urging
that the matter regarding shifting of Toll Plaza be decided
in the arbitration proceedings and the NHAI should not be
allowed to interfere with the decision of the I.E. and
approved by the NHAI which earlier had endorsed the
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shifting. In fact, the NHAI seems to be completely
oblivious of the fact that when the Division Bench of the
Punjab and Haryana High Court had already settled the
dispute by a speaking judgment and order in CWP
No.21332/2011, CWP No.23971/2011 and LPA
No.170/2012 permitting the shifting, what legal authority
was left with the Chairman, NHAI to issue a letter
questioning the shifting. It is rather strange that an
authority in contemptuous disregard to a speaking
judgment and order of the High Court had the audacity to
defy the order which had permitted relocation of toll plaza
and it is equally strange that the High Court also vide the
impugned order, appears to have ignored the fact that
the controversy regarding shifting of Toll Plaza although
had been set at rest by a judicial verdict of the High
Court, the NHAI still insisted that it cannot permit the
shifting when its I.E. (Independent Engineer) had earlier
approved of the same and accepted by NHAI in view of
the specific clause in the agreement to that effect.
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42. In fact, the main contest although is between
the contracting parties/signatories to the Concession
Agreement which are the NHAI and the appellant
company and the agreement had been signed and
executed incorporating the terms and conditions in the
agreement which had approval of the Planning
Commission and the Ministry of Economic Affairs, the
respondent No.5 Union of India appeared which was given
a notice by this Court merely to facilitate and resolve the
controversy between the contracting parties and
admittedly is not a contracting party itself as it is not a
signatory to the Concession Agreement. However, it has
come up in support of the respondent No.6 NHAI which is
represented by the Additional Solicitor General Mr. Paras
Kuhad. However, the learned ASG Mr. Kuhad on behalf of
the Union of India advanced arguments limited to the
issue of permissibility of change of location of the Toll
Plaza within the scheme of applicable statutory provisions
as also the question as to the statutory status of the
Central Government in relation to contract for
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development of national highways. Inter alia it was
submitted that Section 4 read with Section 8 A(1) of the
National Highways Act 1956 makes it clear that national
highways vest in the Union and by virtue of Section 8 (A)
(1), the power to enter into an agreement for
development is also vested with the Central Government.
However, there is no quarrel about this position and
hence is not really required to be gone into or dealt with
in extenso as this position is not disputed by any of the
parties nor we have any doubt that the National Highways
Authority is clearly an authority under the National
Highways Act 1956 and it is the power of the Central
Government to vest or entrust its authority in the National
Highway Authority. We therefore entirely agree with the
learned ASG to the extent that it is the Central
Government which may from time to time by notification
in the official gazette vest in or entrust to the authority
such national highway or any stretch thereof as may be
specified in such notification. This is clearly the provision
also under Section 11 and Section 15 (2) and (3) of the
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National Highway Authorities Act 1988 and Section 15 (2)
of the said Act clearly lays down that subject to the
provisions of sub-section (1), “the form and manner in
which any contract shall be made under this Act shall be
such as may be provided by Regulations.” Sub-section
(3) of Section 11 of the Act 1988 further clearly lays down
that no contract which is not in accordance with the
provisions of this Act and the regulations shall be binding
on the authority. Rule 3(2) of the Rules of 1997 framed
for collection of toll fees under the National Highways
Authority of India Act 1988 further lays down that no
contract which is not in accordance with the provisions of
this Act and the regulations shall be binding on the
authority and the rates of fees and the period of
collection shall be decided and shall be specified by
notification in all official gazette by the Central
Government having regard to the expenses involved in
building, maintenance, management and operation of the
whole or part of such section, interest on the capital
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invested, reasonable return, the volume of traffic and
period of such agreement.
43. Although, the learned ASG has cited several
authorities to establish the provisions incorporated under
the National Highways Authority Act, we do not find any
difficulty in accepting the position even without the ratio
of the authorities relied upon, that in case of statutory
contracts, the terms of the statute prevail over the terms
of the contract. Therefore, determination of the terms
and conditions of the contract will no doubt follow the
deliberations, discussions and views expressed by the
Central Government while drafting the contractual
agreement and the National Highways Authority being an
agency of the Central Government in terms of the Act
itself which has to incorporate the terms and conditions
which is finally included in the draft agreement of the
NHAI. But once the contract is signed by the contracting
parties obviously the contract having assumed the legal
authority of a concluded contract would govern the terms
and conditions of the contract between the parties who
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have signed and thereafter would be binding on the
contracting parties. But to contend that even though the
contract stands concluded after the same has been
singed by the contracting parties, the opinion of the
Central Government on its administrative side will prevail
over the terms and conditions of the contract in absence
of any statutory violation, would be difficult to accept and
it is not even the case in the instant matter that the terms
and conditions in the Concessional Agreement is contrary
to some statute or a central legislation so as to strike
down the clause in the agreement.
44. Therefore, we are of the view that the
Concession Agreement having been signed by the
appellant – joint venture company and respondent No.6 –
NHAI, the role of the Union of India to express its view
over and above the terms and conditions of the contract
in absence of any statutory violation will not be allowed to
prevail as after execution of the contract, it can only issue
the notification in this regard. We, therefore, do not wish
to go further in regard to the correctness or otherwise of
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the contentions urged on behalf of respondent No.6 –
Union of India as its status under the prevailing facts and
situation at the most can be treated as that of a facilitator
and nothing more than that. The position no doubt would
have been otherwise if the Concession Agreement
suffered from the vice of some statutory violation. Since
it is the appellant – joint venture company and
respondent No.6 – NHAI which alone are the parties
between whom the Concession Agreement has been
signed and the agreement is not even remotely alleged to
be in violation of some statute or central Act, the role or
the authority of the U.O.I. to intervene or contest cannot
be allowed as the U.O.I. at the most is a proforma
respondent in this appeal under the prevailing facts and
circumstances.
45. However, the respondent No.1 Harish Kumar
Puri who had initially filed the public interest litigation in
the High Court of Punjab and Haryana merely for ensuring
safety and security of the commuters on the national
highway has also entered appearance in the matter and
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has advanced submissions through the senior counsel
Shri P.S. Patwalia and has practically supported the stand
of the NHAI respondent No.6 as also the impugned order
passed by the High Court which is under challenge in this
appeal. Learned Senior Counsel Mr. Patwalia
representing respondent No.1-PIL petitioner, inter-alia
submitted that the excuse of non-shifting of Toll Plaza by
the appellant/company is merely a ploy to justify its acts
of delay in continuing with the project as it has been
giving excuses one after another for the delay and every
time comes up with a new lame excuse. According to his
averment, the plea of leakage raised by the appellant in
order to shift the Toll Point/Toll Plaza is merely a ruse for
not completing the project. It has been submitted that no
new access/cross roads joining the highway have been
built and the so-called leakage/diversions as alleged by
the appellant are the straight highways and the major
roads are in existence for the last many many years.
Respondent No.1- Mr. Puri has also stated that huge sums
are being transferred from the Esrow accounts which
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should have been spent on the project. It had been
added that the concessionaire while submitting financial
model to the financial institution showed the project cost
as Rs.4517 crores against the actual project cost of
Rs.2747 crores which has been done to secure higher
borrowing which shows that the action of the appellant is
not in public interest. It was also contended that the
dispute regarding shifting of Toll Plaza was not an issue
raised before the High Court. Hence, the appellant
should not be permitted to raise this question before this
Court as the shifting is not at all in public interest since
the appellant by doing so merely wants to enrich itself at
the cost of general public. It has further been contended
that in the event of shifting only a very short stretch of
road will be covered after which the commuters will have
to cross through the Toll Plaza and the commuters of
Haryana will have to pay a huge toll for the entire
Haryana portion which at present is more than Rs.100/-
per vehicle at the Karnala Toll Plaza. If the Toll Plaza is
shifted close to the Panipat area, people traveling for
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extremely short distance and turning of the highway to go
to other States like Himachal Pradesh, Uttarakhand and
Uttar Pradesh via Yamuna Nagar will end up paying toll
for the entire Haryana portion which will not be used by
them. Similarly, if the Shambhu Barrier is shifted to the
proposed location at Neelokheri, people who will travel for
a negligible distance of Punjab highway and turn off the
highway to go to Banaur and further to Himachal Pradesh
and Jammu and Kashmir will end up paying Toll for the
Punjab portion which they will never use. Thus, shifting of
the Plazas will not be in public interest as toll can only be
charged if the commuters are utilizing the facilities of the
highway. It cannot be made as a compulsory extract fee
so that even if a person who is using a very small portion
of the highway should pay for the entire stretch of the
Highway. It was finally submitted that the completion of
the 70 per cent of the highway as claimed by the
appellant is also factually incorrect as the highway
consists of few phases for six laning as dotted with
incomplete projects, half built flyovers abundant service
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lanes. According to respondent No.1 highway traveling is
a nightmare for the traveling public faced with heavy
traffic and ill maintained narrow diversions. Respondent
No.1, therefore, has supported the impugned directions of
the High Court by which the NHAI has been permitted to
take over the project from the appellant and ensure its
completion under its supervision. The respondent No.1
has also given figures of fatal accidents and injuries on
NH No.1 falling in the district of Kurukshetra by which it
sought to establish that the commuters are suffering
heaving losses of lives, properties due to negligence and
failure on the part of the appellant-company despite
paying heavy but illegal toll at various toll barriers on this
road from Panipat to Jullundur. Thus, in sum and
substance respondent No.1 has sought to justify the order
passed by the High Court and submitted that the penal
consequences ought to be allowed to follow and should
not be interfered with because of negligence and apathy
on the part of the concessionaire/appellant herein.
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46. Besides the above, an application for
intervention also was filed by one Chander Prakash
Kathuria who also has come up in support of the NHAI and
has supported the direction of the High Court by which
the High Court directed respondent No.6 NHAI to
forthwith proceed in the matter and take possession of
the highway and ensure that the work for the repair of the
highway commenced within a week and the work for its
completion commenced within a month thereafter. But,
his intervention application having not been allowed,
arguments could not be advanced. In any view, he also
has merely supported the stand of the respondent No.1
and the other contesting respondents NHAI.
47. In any case, the High Court vide its impugned
judgment and order has divested the appellant of its
contractual authority to continue with the project as the
Concession Agreement practically has been annulled and
rescinded since the NHAI has been clearly directed to
take over the project from the appellant and ensure that
the project is completed which clearly implies that the
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construction of the Highway for the rest of the area which
is merely 29% of the project will have to be constructed
by executing another contract in favour of some other
construction company as it was informed to us that the
NHAI itself does not execute the construction and will
have to entrust the same to a new player/contractor. In
fact, the erstwhile counsel Mr. Sethi who represented the
NHAI earlier and was later replaced by Ms. Malhotra had
submitted before this Court that a new contractor has
already been appointed who is ready to take over the
highway project for construction of the balance area of
29% where the construction has to be done. Thus, the
Contractual Agreement has been nullified by the High
Court although it was observed by the High Court itself
that it is not entering into or touching upon the terms and
conditions of the contract. The High Court has further
imposed heavy penalty/fine of Rs.60 crores and Rs.7
crores respectively on the appellant-company and its
director holding them exclusively responsible for delay
and non-completion of construction of the highway
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between Panipat and Jullundur without entering into the
cause of delay of the project as also without considering
whether denial of permission by the NHAI to shift the toll
plaza was in violation of the terms of the Agreement and
whether the same is not in contemptuous disregard to the
order of the High Court passed earlier by a co-ordinate
Bench of the High Court referred to earlier.
48. Learned senior counsel Dr. Abhishek Manu
Singhvi, therefore, has made detailed submissions by way
of rejoinder to the arguments advanced by the contesting
respondent No.6 NHAI which clearly is the main
contesting respondent. Dr. Singhvi while countering the
arguments advanced by the NHAI and the respondent
No.1 Mr. Harish Kumar Puri has focused on the plea that
the High Court while passing the impugned order has
clearly ignored the contractual rights and obligations
contained in the Concession Agreement dated 9.5.2008
but ventured into the arena without taking into account
the contractual rights of the parties, thereupon nullifying
the terms of the Concession Agreement. Learned counsel
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elaborated that the controversy adjudicated by the High
Court vide the impugned order has emerged out of a
public interest litigation filed in the year 1998 and the
Concession Agreement dated 9.5.2008 was executed at a
much later stage after ten years in 2008 between the
appellant company and the respondent No.6 NHAI
granting exclusive right, license and authority to
construct, operate and maintain the highway on a Build,
Operate and Transfer basis (BOT for short) for a period of
15 years. The rights and obligations between the parties
have been determined by incorporating the terms and
conditions which are contained in the Concession
Agreement executed between the appellant and the NHAI
but the High Court has completely ignored the
contractual provisions and has passed directions which
has practically nullified the terms of the contract.
49. Having analyzed the arguments advanced by
the counsel for the contesting parties in the light of the
terms and conditions of the Concession Agreement as
also the contents of the impugned judgment and order of
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the High Court, it is difficult to overlook that the Hon’ble
Judges of the High Court although have recorded that
they did not intend to traverse the contractual obligations
and liabilities of parties and confine their considerations
as far as the orders passed by the High Court is
concerned so as to see whether public interest require
that the said order be extended or vacated, it has indeed
done the same when it directed the NHAI to forthwith
take possession of the Highway Project which in effect
has nullified the contract and has gone much further by
directing the NHAI to ensure completion of the project
which in effect mean that the NHAI would have to invite
fresh tender for construction of the balance 29% area of
the Highway Project as admittedly NHAI itself cannot
undertake the construction. This clearly is nothing short
of cancellation of the Concession Agreement and it is a
misnomer when it observed that it was not traversing the
contractual obligation ignoring its devastating effect on
the contracting party who had completed 71% of the
project and had at least the right to explain whether the
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delay in concluding the project could entirely be
attributed to the appellant or at least some of it could be
fastened on the NHAI which had gone to the extent of not
only backing out of its earlier opinion but also
conveniently shut its eyes that it was violating the order
of the High Court which had earlier upheld the right of the
appellant to shift the toll plaza.
50. Thus, the High Court was not justified in
recording that the delay has been caused merely at the
instance of the appellant so as to pass a blanket order for
transferring the execution of the project to NHAI contrary
to the agreement wherein it was permissible for the
appellant to shift the Toll Plazas and the same was also
approved by the High Court as referred to hereinbefore
time and again. The High Court further seems to have
missed the track, perhaps in its enthusiasm, that the
matter with which it was seized was limited to the
question as to whether the order by which the show
cause notice issued by the NHAI to the appellant
concessionaire-company was ordered to be kept in
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abeyance was fit to be vacated or not as the High Court
was essentially adjudicating the question whether the
NHAI could at all issue a show cause notice to the
appellant-company to terminate the contract and while
the High Court did not enter into the question whether
the said order was fit to be continued or was fit to be
vacated, went into the question whether the appellant-
company was fit to continue with the project which had
been handed over to the appellant by the NHAI by virtue
of a valid agreement executed between the parties
primarily on the ground of delay without really entering
into the cause of delay and considering the plea at whose
instance the contractual obligations had been violated.
51. In fact, even at this stage before this Court, the
respondent NHAI has merely contended that the Toll
Point/Toll Plaza should not be allowed to be shifted from
the point determined earlier and has been asserting that
the Toll Plaza should not be shifted from 146 KM to 110
KM. In fact, the respondent No.6 NHAI neither before the
High Court nor before this Court even remotely had
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contended that the contract should be nullified although
it has contended that shifting of Toll Plaza should not be
permitted as the same according to their averment is
contrary to the terms and conditions of the agreement.
52. There is yet another feature which catches
attention but has been missed by the High Court that
when the High Court itself had prevented the NHAI from
proceedings with a show cause notice given to the
appellant –concessionaire company and has gone to the
extent of passing an order for keeping the show cause
notice in abeyance and the NHAI itself has not contended
either before the High Court or before this Court for
terminating the contract except that it has been opposing
the shifting of Toll Plaza, whether the High Court on its
own could do the same without examining the contractual
obligations. Taking the worst case/situation and even
assuming that the stand of the respondent NHAI were to
be accepted, the appellant at the most could be
prevented from shifting the Toll Plaza from a pre-
determined point to another point in which case the
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appellant might have to continue with the project by not
allowing it to change the location of the Toll Plaza but the
same cannot entail the consequence of final termination
without adjudication at least by an arbitrator for which
there is a clear provision in the Agreement itself. In any
event, the question of termination of the Concession
Agreement without adjudication could not arise at all
when the High Court was merely considering the
application seeking vacation of the stay order to the show
cause notice issued by the NHAI. In case, it had rejected
the application, the show cause notice issued by the NHAI
to the appellant could have proceeded. But the High
Court seems to have taken a giant leap forward by
terminating the contract for all practical purposes without
expressly using the expression “termination” when it
directed the NHAI to take over the project from the
appellant – company and continue with the project and
complete it, nullifying the contract in its entirety.
53. The High Court seems to be completely
oblivious of the fact that it was dealing only with the
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limited question as to whether the NHAI was correct in
issuing show cause notice to the appellant which the High
Court itself by its own order allowed it to be kept in
abeyance for which the NHAI respondent No.6 had filed
an application for vacating this order. Thus, on the other
hand, it kept the order of show cause notice by the NHAI
in abeyance, but when the NHAI came up for vacating the
said order, the High Court straightway directed the NHAI
to take over the project itself from the appellant-company
without caring about its impact on the Agreement which
clearly resulted in its cancellation. The High Court ought
to have realised that if it could not traverse the terms of
the Agreement which the High Court itself has observed,
it surely could not have passed an order which
unequivocally had the effect of canceling the Agreement
and that too without any adjudication.
54. At this juncture, it is difficult to overlook that the
appellant admittedly has completed 71 per cent of the
291 KM stretch and now barely 29 per cent is yet to be
constructed which is enmeshed in litigation over the
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question as to whether the Toll Plaza should be permitted
to be shifted or not. This aspect as was contended by the
respondent No.1, had not been gone into by the High
Court clearly missing that this question had been raised in
the PIL before the High Court wherein the NHAI & Ors.
were a party wherein the appellant had been permitted to
shift the toll plaza. It needs to be highlighted even at the
cost of repetition that the dispute regarding shifting of
Toll Plaza was earlier raised before the High Court by two
separate writ petitions, the reference of which have been
given hereinbefore vide CWP No.21332/2011 and CWP
No.23971/2011 which were filed by two PIL petitioners
but the petitions were rejected. In one of the writ
petitions as noted earlier, an LPA was also filed in the
High Court but the same was dismissed and the dispute
regarding shifting obviously attained finality and could
not have been urged all over again before the High Court.
It is however difficult to appreciate that in spite of the
dispute having been settled regarding shifting of Toll
Plaza by the High Court of Punjab and Haryana which
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clearly attained finality, the respondent NHAI did not
permit the appellant – company to shift the Toll Plazas,
although it had failed to prefer any appeal against the
judgment and order passed by the High Court in CWP
No.21332/2011 and LPA No.170/2012 challenging such
permission.
55. It is no doubt true that the respondent-Union of
India has come up to the rescue of the respondent-NHAI
when it contended that if terms and conditions in the
contractual agreement is contrary to a statute, the Union
of India would be legally authorized to override the terms
and conditions of the contractual agreement. But as
already recorded hereinbefore, the facts of the instant
matter clearly establishes that it is not even the case of
the respondent that the terms and conditions
incorporated in the Concession Agreement was contrary
to any statute or central legislation so as to offer a plank
to the contesting respondent specially NHAI to urge that
the provision under the Concession Agreement had been
overriding a statutory provision of any central legislation
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in absence of any fact or situation establishing even
remotely that the agreement suffered the vice of violating
any central statute/legislation.
56. Thus, apart from the fact that the dispute
regarding the shifting of Toll Plaza had already been
adjudicated by the High Court earlier on two occasions,
the details of which have been given hereinbefore and
the Concession Agreement not being in violation of any
legislation of the centre, the dispute regarding shifting of
Toll Plaza obviously could not have been gone into by the
High Court all over again in the PIL. But while nullifying
the contract on the ground of delay, the dispute
regarding shifting of Toll Plaza which was clearly the only
contentious issue for not completing the project, could
not have been given a go bye or ignored in any manner
by the High Court while taking an undertaking from the
appellant and thereafter cancelling the Concession
Agreement itself when it admittedly did not traverse the
terms and conditions of the Agreement.
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57. Beside the above, it is more than well settled
that a question or an issue which has been raised earlier
before the High Court, adjudicated on which a final
judgment/order was delivered, cannot be allowed to be
raised for the second time as that would be clearly barred
by the principle of constructive res judicata which is too
well known a principle to be dealt with herein. Suffice it to
say that the well-acknowledged principle and equally well
settled legal position seems to have been ignored and
lost sight of not merely by the respondents but by the
appellant company also which filed a writ petition in the
High Court of Delhi raising the issue of shifting of Toll
Plaza which finally was dismissed since the High Court of
Punjab and Haryana had already dealt with it as also by
filing an application for referring the dispute to the
Arbitrator under the Arbitration and Conciliation Act, 1996
completely overlooking that at least this part was not
permissible to be referred for arbitration once on the
judicial side permission to shift the Toll Plaza was
permitted by the High Court of Punjab and Haryana vide
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its judgment and order passed in CWP No.21332/2011
and LPA No.170/2012 which had settled the issue
regarding shifting of Toll Plaza.
58. Besides the aforesaid legal protection which the
appellant enjoyed on account of the judgment and order
in its favour given by the High Court, the terms and
conditions in the Concession Agreement itself regarding
shifting of Toll Plaza was approved by the NHAI which
permitted that the Toll Plaza could be shifted provided the
Independent Engineer appointed by the NHAI approved of
the same. No doubt, initially the Independent Engineer
(I.E. for short) initially expressed certain reservations
regarding the relocation of the Toll Plazas vide letters
dated 18.3.2010, 2.4.2010 and 29.5.2010 but
subsequently the Independent Engineer, Project Director
and CGM NHAI in their recommendations recorded their
view that the location of two Toll Plazas is for different
facilities provided to the public and, therefore, there is no
reservation locating Toll Plaza at KM 110. In fact, it needs
to be highlighted that in terms of Article 48.1 of the
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Concession Agreement, liberty has been granted to the
appellant to decide the locations of Toll Plaza in
consultation with the I.E. and the same was finally
approved by the I.E. M/s. Louis Berger who conveyed his
approval to the change of location as proposed by the
appellant and hence the same cannot be allowed to be
re-agitated despite confirmation of the same by the High
Court vide its judgment and order passed in the writ
petitions and the LPA against which no appeal was
preferred either by the NHAI or the PIL petitioner or any
other concerned respondents.
59. Thus, the stand of the NHAI appears to be
clearly illegal and arbitrary and a clear case of an after
thought taken in the present proceedings before this
Court as the NHAI ad idem was in complete agreement
with the appellant as regard its right for relocation of Toll
Plazas. The same is recorded and clearly reflected in the
correspondence of various officers of NHAI, minutes of
meeting, stand of Independent Engineer including its
stand before the High Court of Punjab and Haryana and
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hence the NHAI cannot be permitted to resile from its
stand at this distant point of time as the affidavits were
filed as early as 2011 which finally upheld the location of
the Toll Plazas. The correspondence on record further
belies the stand now taken by the NHAI as various officers
of NHAI were of the same view that relocation of Toll
Plazas is permissible under the Agreement and the
change in stand happened in the meeting held for the
first time on 21.3.2013 when the present Chairman took
the stand that relocation is impermissible and the
decision not to permit relocation of Toll Plazas was taken
as late as on 3.5.2013 which is not merely highhanded
and illegal but contrary to the judgment and
order of the High Court which permitted relocation vide
its reasoned judgment and orders as already referred to
hereinbefore which were never challenged and hence
attained finality. Moreover, based on the in principle
approvals granted by NHAI and the stand of NHAI, the
lenders continued to disburse funds and the appellant
continued to invest in the project on the plea that the
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implementation of the decision to relocate the Toll Plazas
would be done after the decision of the High Court of
Punjab and Haryana upholding the relocation of Toll
Plazas. It is therefore too late in the day for the NHAI to
take such specious and untenable plea with a view to
wriggle out of its obligation which cannot be permitted by
this Court.
60. In fact, this Court was informed that the officers
of the NHAI which had approved of the shifting of Toll
Plazas are facing departmental action which has been
initiated against Rajeev Kumar Koundal, S.S. Geharwar
and S.I. Patel. But the stand of the NHAI appears to be
clearly an afterthought and an attempt to justify its
irrational/arbitrary/conflicting stand with regard to the
rights of the appellants for deciding the location of Toll
Plazas under the Concession Agreement and the
approvals granted by NHAI under the said agreement.
The alleged action initiated by the NHAI, therefore,
cannot justify its stand taken before this Court for the first
time nor can it permit to act contrary to the terms of
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Concession Agreement ignoring the orders passed by the
High Court on the judicial side in two PIL petitions which
were filed challenging the order for relocation of Toll
Plazas.
61. It is rather chaotic as also jurisdictional error
that in spite of several orders passed by three different
co-ordinate Benches of the High Court on the judicial side
permitting relocation of the Toll Plazas, the dispute did
not set at rest and the High Court while dealing with the
PIL has not even taken note of the fact that if it was
nullifying the Concession Agreement on the ground of
delay of the project without entering into the rights and
obligations of the Concessionaire-appellant and
Respondent No.6 NHAI ignoring that the NHAI could not
have been permitted to get away from the onus of
delaying the project when it failed to honour its
contractual obligation.
62. The entire exercise of the High Court while
passing the overzealous directions giving a go by to the
rights and obligations under the Concession Agreement
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and the orders passed by the High Court while dealing
with limited issue in the PIL as to whether a show cause
notice by the NHAI was justified or not could not have
refused to scrutinize the reasons for the delay on the
ground that it was not entering into the terms and
conditions of the contractual agreement and yet went to
the extent of nullifying the agreement oblivious of its
consequence that the impugned direction of the High
Court clearly resulted in cancellation of the agreement
itself.
63. It is further difficult to overlook that over 71 per
cent of the Highway Project having been admittedly
completed by the appellant-Concessionaire, it would
delay the project without reason and is not sincere in its
attempt to complete it as delaying the project cannot
possibly benefit the appellant-Concessionaire since the
income would be generated by the appellant only when
the Toll Plaza is constructed and the revenue from toll at
present is being deposited in the ESCROW account. It
further cannot be overlooked that the NHAI is not funding
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the project in any manner as the agreement is in the
nature of BOT mode which means Build, Operate and
Trade (‘BOT’ for short) and the appellant cannot generate
profit without undertaking the construction further. It is,
therefore, pertinent to take note of the fact that the
project being in BOT mode, all investment in the project
has to be made by the appellant and no amount is
received from NHAI. It may further be noted that the
agreement between the appellant and respondent No. 6
NHAI acknowledges and confirms the role of lending
institutions, mainly nationalized banks as a major
significant holder in project implementation. All the
financing agreement dealing with the administration
occurred between lending institutions and the petitioner
as well as the financial model for the project has been
submitted that their revenue and approval prior to the
commencement of the project. The appellant-
Concessionaire therefore states that it is committed to
the completion of the project asserting that its endeavour
is to complete the six laning works at the earliest since it
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is not a gainer in any manner if the project is at a stand
still and the appellant also would gain only if the project is
started.
64. Consequent upon the aforesaid analysis of the
background of the matter and the sequence of events
arising out of a Public Interest Litigation which led to the
execution of a Concession Agreement creating
contractual relationship between the appellant
Concessionaire-company and the respondent No. 5 NHAI,
it is manifest that the High Court has issued over zealous
directions which has resulted into termination of the
concession agreement itself when it directed the
respondent No.5 NHAI to take over the project from the
appellant and ensure the balance construction of the
highway project by itself. Although, the High Court has
observed that it was not entering into the arena of the
contractual terms and conditions of the agreement, it
has clearly nullified and terminated the contract itself
when it directed the NHAI to take over the project from
the appellant-company overlooking the bonafide of the
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appellant-company which has already completed major
portion of the construction which is 71 per cent of the
total area of 291 KMs and only 29 per cent is to be
constructed further, when a dispute arose between the
appellant-company and the respondent NHAI in regard to
shifting of the Toll Plaza from KM 146 to KM 110 and KM
212 to KM 211 and the NHAI for the first time in 2013
reneged from its consent to permit shifting contrary to
the terms of the agreement. However, in course of oral
argument before this court, the respondent NHAI had
yielded and did not seriously dispute the shifting from
KM 212 to KM 211 and rightly so as the shifting is hardly
at a distance of 1KM from KM 212 to KM 211 at Shambhu
Toll Plaza which is negligible and the shifting has already
taken place as discussed hereinbefore. But, the
respondent No.5 NHAI has raised serious objections in
regard to shifting of the Toll Plaza from KMs 146 to KM
110 which appears to have been done for the first time in
the year 2013 when the new incumbent took over as
Chairman of the NHAI ignoring the fact that the
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Independent Engineer in terms of the agreement had
granted approval to the same way back on 30.6.2010. In
addition, the dispute regarding shifting of Toll Plaza had
already been settled by the High Court when it permitted
the appellant to shift the Toll Plaza to KMs 110
against which NHAI did not file any appeal challenging
the order of the High Court. Thus, in spite of the fact that
the dispute regarding shifting of toll plaza had attained
finality by virtue of a series of judicial verdict, the newly
appointed Chairman, NHAI for the first time in 2013
restrained the appellant-company from shifting the Toll
Plaza to KMs 110 and this clearly resulted into putting
the entire project to a standstill since the project was to
be financed by way of Build, Operate, Trade mode (BOT
mode) and affected financing of the project and the
matter got enmeshed into a series of litigations related
hereinbefore. But the High Court refused to go into this
dispute stating that it does not want to go into the terms
and conditions of the contract and directed for
undertaking from the appellant attributing the entire
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delay to the appellant-company for non performance and
finally terminated the contract when it directed the
respondent NHAI to take back the project from the
appellant. Assuming the High Court did it in public
interest to expedite the construction of the highway, it
is more than obvious that this direction of the High Court
cannot possibly and practically expedite the construction
as admittedly the NHAI itself do not undertake any
construction work of the highway which clearly implies
that it will have to issue a fresh tender for construction of
the balance area of the project which is bound to result
into greater delay of the project apart from the fact that
the dispute between the appellant-company and the
NHAI would still survive and finally a 3rd party being a new
player is bound to get entangled giving rise to further
legal complications in the whole process.
65. In addition to this it is difficult to overlook that
the High Court was merely seized with the limited issue
in the pending PIL as to whether the Show Cause Notice
issued by the NHAI to the appellant-company which was
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ordered to be kept in abeyance by order of the High
Court itself, was fit to be vacated on an application filed
by the respondent NHAI, but while doing so the High
Court took a leap much way ahead by cancelling the
agreement itself for non performance ignoring the main
issue as to whether the Show Cause Notice issued by
the NHAI was fit to be sustained or the order keeping it in
abeyance was fit to be vacated and straightway
concluded that the appellant-company had delayed the
project completely overlooking that the contractual
violation had been done by the NHAI when it declined to
permit shifting of the Toll Plaza from KMs 146 to KM 110
in spite of the reasoned orders of the High Court to that
effect against which no appeal was filed either by the
NHAI or the PIL petitioner or any other concerned party.
It is no doubt true that in a public interest litigation the
court at times may forego/overlook the technicalities
coming in the way of issuance of any direction which
may conflict or jeopardise the public interest. But the
same cannot be allowed to reach to the extent or affect
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the contractual agreement itself which reduces a valid
and a legal document into a worthless piece of paper or a
waste paper which clearly means that the relationship
between the parties although were to be governed and
supported by a valid legal document, the same would
finally turn out to be a document having no legal
significance in spite of its validity in the eye of law. If this
were to be permitted, it is bound to lead to a chaotic
situation affecting the very fabric of the rule of law which
cannot be allowed to prevail over a valid and legally
supported document conferring certain rights on the
person or entity possessing it.
66. As a consequence and fall out of the above
position, we deem it just and appropriate to set aside
the impugned directions of the High Court, and permit
the appellant to restore the construction of the balance
stretch/area of the highway project by further directing
the NHAI to permit the appellant to shift the Toll Plaza
from KM 146 to any point between KMs 110 and KMs 117
with concurrence of the NHAI. The exact point of
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construction of Toll Plaza between KMs 110 to KMs 117
shall thus be decided by the NHAI holding mutual
consultation with the appellant/concessionaire in the light
of the approval already granted by the Independent
Engineer in terms of the Agreement which also had been
approved by the High Court earlier. However, we take
note of the fact that the High Court although by its order
referred to hereinbefore permitted shifting of the Toll
Plaza in dispute to point KM 110, we have noticed that
the distance between KMs 96 where Toll Plaza of L & T is
existing and the proposed toll plaza at KMs 110 would be
at a distance of only 14 KMs which may not be in the
interest of the commuting public and, therefore, we
direct that the shifting although may not be permitted at
KMs 110, it may be allowed to be shifted at any point
between KMs 110 and KMs 117 in consultation and with
concurrence of the NHAI. In fact, we could have
directed the appellant to shift the Toll Plaza even beyond
117, KMs but we have been informed that beyond KM
117 the area is thickly populated and would not be
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practically possible to set up the Toll Plaza beyond KMs
117.
67. Therefore, and in order to facilitate and expedite
completion of the Highway Project, we direct the respondent
NHAI to permit shifting of Toll Plaza from 146 to anywhere
between KMs 110 and KMs 117 expeditiously but not later
than a period of two months from the date of this order
during which period the required legal formality of notifying
the area for construction of the Toll Plaza shall also be
complied with by the NHAI by getting it notified through the
Competent Authority and making the land available free from
all encumbrance. The appellant thereafter shall forthwith
restart the construction including setting up of Toll Plaza at
the agreed point and continue with construction of the
remaining area of the Highway Project and shall complete the
entire construction of the Highway on or before 31st of March
2015 failing which the appellant/concessionaire company shall
be liable for penal consequences to be determined by the
NHAI in terms of the Concession Agreement.
68. The appellant/concessionaire company is further
directed to report/update the progress/development of the
construction to the NHAI referred to in the Concession
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Agreement after every three months from the date of
compliance of the required statutory notification for shifting
of Toll Plaza at the instance of the NHAI and the Ministry of
Road Transport and Highways/any other competent authority.
However, we make it explicitly clear that no dispute shall be
allowed to be raised further by any of the parties before any
court which may impede or slow down the progress of
completion of the Highway Project as this measure most
certainly would not be in the interest of the Highway Project
and consequently not in public interest in any manner.
However, the main contesting parties i.e. the appellant-
Concessionaire Company and the NHAI would be at liberty to
seek such other or further direction from this Court in case
there is bona fide need to resort to such an eventuality in
regard to the Highway Project referred to in the Agreement.
The appeal accordingly is allowed but in the circumstances
leave the parties to bear the costs on their own.
…………………………….J. (Gyan Sudha Misra)
…………………………….J. (Pinaki Chandra Ghose )
New Delhi, April 17, 2014
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