$~

* IN THE HIGH COURT OF DELHI AT NEW DELHI

Pronounced on: 31 July 2023

+ O.M.P. (COMM) 185/2021 & I.A. 7662/2021, I.A. 7663/2021,

I.A. 7664/2021, I.A. 8668/2021, I.A. 14383/2021

NATIONAL HIGHWAY AUTHORITY OF INDIA

.....Petitioner
Through: Mr. Ankur Mittal, Mr.Abhay
Gupta & Mr. Raushal Kumar, Advs.

versus

MS JAS TOLL ROAD COMPANY LTD ..... Respondent

Through: Mr.Sandeep Bajaj and
Mr.Devansh Jain, Advs.

CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
JUDGMENT
% 31.07.2023

1. The present petition, under Section 34 of the Arbitration and

Conciliation Act, 1996 (“the 1996 Act”) assails an award dated 31
December 2020, unanimously passed by an Arbitral Tribunal
consisting of three learned Members in an arbitration between Jas Toll
Road Company Ltd. (as the claimant) and National Highway
Authority of India (as the respondent). For the sake of convenience,
the petitioner and respondent would be referred to hereinafter as
“NHAI” and “JTR”, respectively.

2. JTR, as the claimant before the learned Arbitral Tribunal,

preferred 12 claims. The learned Arbitral Tribunal has granted relief
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 1 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 to JTR in all 12 claims except Claims 7 and 9, of which Claim 7 was
withdrawn by JTR. The learned Arbitral Tribunal has ultimately
awarded, to JTR, an amount of ₹ 3,31,53,482/- with interest, on
various claims, running from various dates. Additionally, the learned
Arbitral Tribunal has granted extension of the Concession Period,
under the Concession Agreement (CA) dated 28 June 2001 executed
between NHAI and JTR, by a total of 474 days, as against 1155 days’
extension sought by JTR.

3. NHAI and JTR have both assailed the aforesaid award dated 31
December 2020 before this Court under Section 34 of the 1996 Act.
However, at joint request of learned Counsel, this Court heard
arguments on the sustainability of the impugned award insofar as it
granted 474 days extension of time of the Concession Period to JTR.
Inasmuch this extension of time had been granted under Claims 2, 4
and 5, arguments were heard on the sustainability of the impugned
award with respect to Claims 2, 4 and 5 and judgment was reserved.

4. This judgment, therefore, examines the legal sustainability of

the impugned award dated 31 December 2020, passed by the learned
Arbitral Tribunal, insofar as it grants extension of time of the
Concession Period under Claims 2, 4 and 5 preferred by JTR before
the learned Arbitral Tribunal.

Facts

Relevant Agreements
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 2 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 5. The dispute in this case revolves around CA dated 28 June 2001
and a supplementary Concession Agreement (hereinafter
“Supplementary CA”) dated 10 July 2006 executed between NHAI
and JTR.

6. Consequent to entrustment, by the Ministry of Road Transport

and Highways (MORTH), Government of India, of the work of
widening and rehabilitation of the two lanes stretch from
Neelamangala to Tumkur of National Highway-4 (NH-4) in the State
of Karnataka, into a four lane divided carriageway, to NHAI,
proposals were invited by NHAI from interested bidders for carrying
out the aforesaid task on build, operate and transfer (BOT) basis. The
bid of a consortium of M/s Jayaswal Neco Limited, M/s SREI
International Finance Limited and M/s Jayaswals Ashoka
Infrastructure Private Limited was accepted by NHAI and Letter of
Award (LOA) was issued, consequently, on 2 May 2001, awarding the
contract for the project, spanning 29.5 km to 62 km of NH-4 in the
State of Karnataka to the consortium.

7. The LOA required the consortium to promote a Special Purpose

Vehicle (SPV) to carry out the project. JTR was incorporated by the
consortium as the SPV for implementing the project. It was
consequent thereon that, on 28 June 2001, the CA came to be executed
between NHAI and JTR, the relevant clauses of which are reproduced
as under:

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 3 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 “1.1 Definitions

In this Agreement, the following words and expressions shall,

unless repugnant to the context or meaning thereof, have the
meaning hereinafter respectively assigned to them:

“Appointed Date” means the date on which Financial Close is

achieved in accordance with Article XXII and shall be deemed to
be the date of commencement of the Concession Period.

“COD” means the commercial operations date of the Project

Highway and shall be the date on which the Independent Engineer
has issued the Completion Certificate or the Provisional Certificate
upon completion of four-laning of the Project Highway in
accordance with the Agreement.

“Completion Certificate” means the Certificate issued by the

Independent Engineer pursuant to Clause 16.4.

“Concession Period” means the period beginning from the

Appointed Date and ending on the Termination Date.

“Concessionaire” means JAS Toll Road Company Limited and its

successors and substitutes expressly approved in writing by NHAI.

“Fee” means the charge levied on and payable for a vehicle using
the Project Highway in accordance with the Fee Notification and
this Agreement.

“Fee Notification” means the Notification to be issued by GOI in

exercise of the powers conferred by Sub-rule (1) and (2) of Rule 3
of the National Highways (Collection of Fees by Any Person for
the Use of Section of National Highways/Permanent
Bridge/Temporary Bridge on National Highways) Rules, 1997 in
respect of the levy and collection of the Fees and a copy of which
is at Schedule "G" and includes any such subsequent notifications
issued from time to time to give effect to the provisions of this
Agreement.

“Financial Close” means the date on which the Financing

Documents providing for funding by the Senior Lenders have
become effective and the Concessionaire has immediate access to
such funding under the Financing Documents.

“Force Majeure” or “Force Majeure Event” shall mean an act,

event, condition or occurrence specified in Article XXIX.

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 4 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 “Independent Engineer” shall have the meaning ascribed thereto in
Clause 20.1.

“Indirect Political Event” shall have the meaning ascribed thereto

in Clause 29.3.

“Material Adverse Effect” means material adverse effect of any act

or event on the ability of either Party to perform any of its
obligations under and in accordance with the provisions of this
Agreement.

“Non Political Event” shall have the meaning ascribed thereto in

Clause 29.2.

“O&M” means the operation and maintenance of the Project

Highway during the Operations Period and includes but is not
limited to functions of maintenance, collection and appropriation
of Fees and the performance of other services incidental thereto.

“Operations Period” means the period commencing from COD and

ending on the Termination Date.

“Political Event” shall have the meaning ascribed thereto in Clause

29.4.

“Project Completion” shall have the meaning ascribed thereto in

Clause 15.1.

“Project Highway” means the rehabilitation and widening of the

existing two lanes of NH-4 from km 29.5 to km 62 and addition of
2 (two) more lanes thereto so as to have four lanes and shall
include the Project Assets and the Project Facilities to be designed,
engineered and built on Site and to be operated and maintained
during the Concession Period in accordance with the provisions of
this Agreement.

“Provisional Certificate” shall have the meaning ascribed to it in

Clause 16.5.

“Punch List” shall have the meaning ascribed to it in clause 16.5.

“Scheduled Project Completion Date” shall have the meaning set

forth in Clause 15.3.

*****

VI Fees
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 5 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 6.1 The Concessionaire shall be entitled during the Operations
Period to levy and collect the Fees from the users of the Project
Highway pursuant to and in accordance with the Fee Notification
set forth in Schedule “G” and this Agreement. Provided, however,
that such Fee shall be rounded off upwards to the nearest one rupee
for ensuring ease of payment and collection.

6.2 The Concessionaire acknowledges that the Fee

Notification, inter alia, provides for annual revision in the Fees
linked to the extent of variation in WPI as per the Fee Notification,
and hereby confirms that save and except as provided in the Fee
Notification, the Concessionaire is not entitled to and shall not
seek any relief whatsoever from NHAI, GOI or GOK on account of
increase or otherwise in WPI or on any other account except in
accordance with the express provisions of this Agreement.

6.3 The Concessionaire shall not collect any Fees in excess of

50 % of the applicable Fees for the specific category of the vehicle
from such users of the Project Highway who use the Project
Highway without crossing more than one Toll Plaza.

6.4 The Concessionaire shall not collect any Fees in relation to

Exempted Vehicles.

*****

14.5(d) If suspension of Construction Works is for reasons not

attributable to the Concessionaire, the Independent Engineer shall
determine any extension to the Project Completion Schedule, the
Schedule Project Completion Date and the Concession Period, to
which the Concessionaire is reasonably entitled and shall notify
NHAI accordingly. NHAI shall extend the Project Completion
Schedule, the scheduled Project Completion Date and the
Concession Period in accordance with the recommendations of the
Independent Engineer.

*****

15.4 If the Project Completion is not achieved by the Scheduled

Project Completion Date for any reason other than conditions
constituting Force Majeure or for reasons attributable to NHAI or
any Governmental Agency, the Concessionaire shall pay to NHAI
as weekly Damages for delay in the achievement of the COD, an
amount calculated at the rate of 0.01% (point zero one per cent) of
the Total Project Cost per week or part thereof.

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 6 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 *****

29.2 Non Political Force Majeure Events: For purposes of

Clause 29.1 Non-Political Events shall mean one or more of the
following acts or events.

(i) acts of God or events beyond the reasonable control

of the Affected Party which could not reasonably have been
expected to occur, exceptionally adverse weather
conditions, lightning, earthquake cyclone, flood, volcanic
eruption or fire (to the extent originating from a source
external to the Site or beyond design specifications for the
Construction Works) or landslide,

(ii) radioactive contamination or ionizing radiation;

(iii) strikes or boycotts (other than those involving the

Concessionaire. Contractors or their respective employees/
representatives or attributable to any act or omission of any
of them) interrupting supplies and services to the Project
Highway for a period exceeding a continuous period of
(seven) days in an Accounting Year, and not being an
Indirect Political Event set forth in Clause 29.3 hereof;

(iv) any failure or delay of a Contractor but only to the

extent caused by another Non-Political Event and which
does not result in any offsetting compensation being
payable to the Concessionaire by or on behalf of Such
Contractor;

(v) any judgment or order of any court of competent

jurisdiction or statutory authority in India made against the
Concessionaire in any proceedings for reasons other than
failure of the Concessionaire to comply with any
Applicable Law or Applicable Permits or on account of
breach thereof, or of any contract, or enforcement of this
Agreement or exercise of any of its rights under this
Agreement by NHAI; or

(vi) any event or circumstance of a nature analogous to

any of the foregoing.

*****

29.6 Effect of Force Majeure Event after Financial Close.

Upon occurrence of any Force Majeure Event after Financial
Close, the following shall apply:
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 7 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 (a) There shall be no Termination of this Agreement
except as provided in Clause 29.8;

(b) Where the Force Majeure Event occurs before COD

the dates set forth in the Project Completion Schedule and
the Concession Period shall be extended by the period for
which such Force Majeure Event shall subsist.

(c) Where a Force Majeure Event occurs COD, the

Concessionaire shall continue to make all reasonable efforts
to collect Fees but if he is unable to collect fees during the
subsistence of such Force Majeure Event, the Concession
Period shall be extended by the period for which collection
of Fees remains suspended on account thereof and

(d) Costs arising out of or concerning such Force

Majeure Event shall be borne in accordance with the
provisions of Clause 29.7.

*****

39.1 Amicable Resolution

(a) Save where expressly stated to the contrary in this

Agreement, any dispute, difference or controversy of
whatever nature howsoever arising under, out of or in
relation to this Agreement including incompletion of the
Project Highway between the Parties and so notified in
writing by either Party to the other (the "Dispute") in the
first instance shall be attempted to be resolved amicably in
accordance with the conciliation procedure set forth in Sub-
clause (b) below.

(b) In the event of any Dispute between the Parties,

either Party may call upon the Independent Engineer to
mediate and assist the Parties in arriving at an amicable
settlement thereof. Failing mediation by the Independent
Engineer or without the intervention of the Independent
Engineer, either Party may require such dispute to be
referred to the Chairman of NHAI and the Chairman of the
Board or Directors of the Concessionaire, for the time being
for amicable settlement. Upon such reference, the said two
Chairmen shall meet not later than 7 (seven) days of the
date of such request to discuss and attempt to amicably
resolve the Dispute. If such meeting does not take place
within the said period or the Dispute is not amicably settled
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 8 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 within 15 (fifteen) days of such meeting between the said
two Chairman either Party may refer the dispute to
arbitration in accordance with the provisions of Clause
39.2.

(c) If the Dispute is not resolved as evidenced by the

signing of the written terms of settlement within 30 (thirty)
working days of the aforesaid notice in writing or such
longer period as may be mutually agreed by the Parties then
the provisions of Clause 39.2 shall apply.”

8. During the course of construction of the Project Highway, there

was a nationwide strike of transporters, from 13 April 2003 to 23
April 2003.

9. Following this, in October 2003, extraordinarily heavy rains

impacted progress of the construction.

10. On 10 November 2003, the Project Director (PD) wrote to the

CGM, NHAI, drawing attention of the latter to the transporters’ strike
and to the exceptionally heavy rains, both of which were stated to
have impacted progress of the contract. It was pointed, in the said
letter, that Zaidun Leeng Sdn. Bhd., the Independent Engineer (IE)
had recommended (i) extension of the completion period by 20 days
on account of the transporters’ strike, qualifying it as an event of non-
political force majeure under Clause 29.2(iii) of the CA and (ii)
extension of time, without specifying any period, for the interruption
in the progress of the project owing to the rains, under Clause 29.2(i)
of the CA, as the rains had resulted in complete cessation of work for
8 days in October 2003. Though JTR had requested for 30 days’
extension of time on account of heavy rains, the Project Director
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 9 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 opined that rains, during the monsoon season, were reasonably
anticipated and expected and could not, be regarded as an event of
force majeure as defined under Clause 29.2 of the CA. Nonetheless,
in view of the recommendation of the IE, the Project Director
suggested that extension of time by 8 days, on account of the rains,
could be considered.

11. On 28 November 2003, the IE wrote to the Project Director,

NHAI, opining that the exceptionally heavy rains in October could not
be entirely attributed to the monsoon, but were also because of a low
pressure area which had developed in the Bay of Bengal. The
communication recommended, ultimately, extension of the concession
period by 45 days on account of the transporters’ strike and the rains.

12. On 10 February 2004, the IE issued the following Provisional

Completion Certificate to JTR:

“PROVISIONAL COMPLETION CERTIFICATE

I/We Zaidun-Leeng Sdn. Bhd. [JV] Artefacts Projects acting as

Independent Consultant on the project of widening and
strengthening of existing 2 lane carriageway from Km.29.500 to
Km. 62.000 of NH-4 (Nelamangala Tumkur Section) and its
operation and maintenance on build, operate and transfer (BOT)
basis, through the Concessionaire M/s JAS Toll Road Co. Ltd
hereby issue this provisional certificate of completion in terms of
sub-clause 16.5 of Concession Agreement dated 28th June, 2001,
between the said Concessionaire and the NHAI, on the request of
the said Concessionaire made vide letter No. JAS/NH-
4/SG/IC/03/4346 dated 29th January 2004 subject to the appended
Punch List containing a list of outstanding items since the tests
stipulated in Schedule J have been successfully carried out and all
parts of Project Highway can be legally, safely and reliably placed
in commercial operations though certain works and things forming
part thereof are not yet complete as indicated in the said Punch
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 10 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 List. All the Punch List items shall be completed by the said
Concessionaire within 120 (One Hundred and Twenty) days of the
date of issue of this Provisional Certificate of completion.

Dated: 10th February 2004

Sd/- and Sealed

(B. ANANTHA RAO)
(Team Leader)

For Zaidun-Leeng Sdn. Bhd. Artefacts Projects (JV)

(Independent Consultants)”

13. The Variations Committee of the NHAI held a meeting on 10

March 2004, during which it was decided that, though a delay of 42
days had occurred in completion of the work by JTR, no penalty was
to be levied on JTR on that account. This decision was communicated
by the GM (MC-III) to the Project Director, vide the following letter
dated 29 March 2004:
“ Dated:29/03/2004
To

The Project Director,

Project Implementation Unit,
National Highways Authority of India,
Near JMIT, NH-4 (Km 201),
Chitradurga – 577 502
Karnataka

Sub: Four laning and strengthening from km 29.52 to km

62.0 (Neelamangala-Tumkur) Section of NH-4 in
the state of Karnataka – Extension of time – Reg.

Ref: Your letter no. NHAI/PIU-CTA/N-T/JAS/03-

04/2736, dt. 10/11/2003

Sir,

This is with reference to your letter cited, wherein you have

forwarded the proposal for granting extension of time for the
worker referred to in the above subject. The Competent
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 11 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 Authority has decided that the concessionaire should not be
levied any penalty for delay of 42 days in completing the
work. A copy of minutes of the meeting of Variations
Committee held on 10.03.2004 on the above subject is
enclosed for further action.

Thanking you,

Yours Sincerely,
Sd.
(B.K. Bansal)
General Manager (MC-III)”

14. There was a second nation wide transporters’ strike which

lasted from 20 August 2004 to 29 August 2004. In connection
therewith, JTR wrote to the IE on 28 August 2004, informing IE that
the transporters’ strike, which had started on 21 August 2004,
constituted an indirect political force majeure event, inasmuch as
seven continuous days of the strike had expired on 27 August 2004.
In view thereof, the IE was requested to take action in accordance
with Clause 29.6(c) of the CA. The aforesaid request was reiterated
by JTR in its letter dated 4 September 2004 to the IE, in which it was
noted that the transporters’ strike had been called off on 28 August
2004 and traffic had gradually increased from 29 August 2004
onwards. A chart, tabulating the toll collection, from 20 August 2004
to 29 August 2004 was also provided with the letter, which indicated
that the toll collection had dipped from 21 August 2004 and that the
effect of the strike had continued to be felt till 28 August 2004. In
these circumstances, JTR sought extension of 8 days in the concession
period on account of the transporters’ strike from 21 August 2004 to
28 August 2004.

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 12 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 15. The IE, vide letter dated 18 October 2004 addressed to the
Project Director, opined, after going through all the relevant data, that
there had indeed been a drop in revenue collection between 20 August
2004 and 28 August 2004, i.e. for a period of 8 days on account of the
transporters’ strike, which entitled JTR to relief under Clause 29.3(iii)
and consequent compensation under Clause 29.6(d) and 29.7(b) of the
CA, but not to extension in the concession period under Clause
29.6(c), as collection of toll fees did not remain suspended during the
period of the transporters’ strike.

16. On 25 November 2004, the IE issued the following Completion

Certificate dated 1 November 2004 to the JTR:

“COMPLETION CERTIFICATE

We Zaidun-Leeng Sdn. Bhd. & Artefacts Projects (JV) acting as

Independent Consultants on the project of widening and
strengthening of existing 2 lane carriageway from km 30 to km 62
of Neelamangala-Tumkur section of National Highway No. 4 and
its Operation and Maintenance on Build, Operate and Transfer
(BOT) basis, through the concessionaire, JAS Toll Road Company
Limited hereby issue this Completion Certificate in terms of Sub-
clause 17.4 of Concession Agreement since the facility envisaged
therein has been completed and successfully tested as per Schedule
J as stipulated in the said Concession Agreement dated 28th June
2001 between the said Concessionaire and the NHAI subject to
exclusions admissible under the provisions of Clause 13.5 of
Concession Agreement which shall be subsequently completed by
the Concessionaire.

Dated: 01.11.2004

For ZAIDUN-LEENG SDN. BHD. ARTEFACTS

PROJECTS (JV)
Sd
Independent Consultants”

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 13 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 17. On 28 March 2005, JTR wrote to NHAI raising various claims.
Among this was a claim seeking acceptance of the recommendation of
the IE for extension of the concession period of 45 days on account of
the transporters’ strike, which had taken place in April 2003 and the
rains which had affected the area in October 2003.

18. The Karnataka Lorry Owners Association called for a further

strike on 19 June 2005 and from 20 June 2005 stopped transportation
of trucks carrying construction material, including sand, in protest
against the decision of the State Government to ban sand mining in
Kolar. When the strike entered the fifth day, JTR wrote, on 24 June
2005, to the Project Director, NHAI, submitting that the strike
justified being regarded as an indirect political force majeure event
within the meaning of Clause 29.3(iii) of the CA. Newspaper cuttings
regarding the strike were also enclosed with the letter.

19. On more than seven continuous days elapsing since the

commencing of the strike, JTR wrote on 29 June 2005 to the Project
Director, NHAI, informing him that the strike qualified as an Indirect
Political Force Majeure Event within the meaning of Clause 29.3(ii)
of the CA. The Project Director was requested to confirm acceptance
of the said fact.

20. This was followed by a letter dated 7 July 2005 from JTR to the
Project Director, NHAI informing that the strike had been called off
on 5 July 2005, whereafter traffic had been gradually picking up. The
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 14 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 strike had, therefore, continued for 15 days, from 20 June 2005 to 5
July 2005. The shortfall in toll collection was tabulated and submitted

with the letter, quantifying the total loss on account of strike as ₹

5,04,966/-. On 9 August 2005, the JTR wrote to the Project Director,

NHAI, re-computing the loss suffered by it on account of the aforesaid

strike as ₹ 6,39,148/- and also seeking one day’s extension in the

concession period because of the strike.

21. In the interregnum, and after the achievement of the PCOD,

local users were raising protests at having to pay toll at the same rate
as was being charged by others. As attention of the NHAI had been
invited to this aspect by JTR, the matter was taken up in the MORTH
in June 2004. A decision was taken by the MoRTH in June 2005, to
allow concessional toll rates to Local Personal Traffic (LPT) and to
compensate JTR by way of extension of the concession period. It was
also suggested that a supplementary agreement be drawn up, which
later came to be executed on 10 July 2006.

22. In this context, a meeting was convened on 5 May 2006 under

the Chairmanship of the CGM (MC), “to resolve issues related to
implementation of concession to local users” in respect of the Project
Highway. Inter alia, the following decisions were taken at the said
meeting:

“1. Modification in Schedule G regarding indicating user

fee as on December 2003

The base rate as indicated in the existing Schedule ‘G’ should

Signature Not Verified
O.M.P. (COMM) 185/2021 Page 15 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 prevail and no further amendment in this regard would be
necessary. On insistence of the concessionaire that increase in toll
rate announced by him would not be considered authorized and
questioned by the public, it was agreed that the Project Director
would publish a public notice by indicating the actual rates to be
charged from users with reference to a particular date.

2. Effective date for calculating losses to the

Concessionaire and compensation thereof

It was decided that the Concessionaire would be eligible for

compensation from the current date i.e., signing of supplementary
agreement and notification thereof. No compensation to
Concessionaire can be made from a retrospective date.

The representative of Concessionaire expressed

reservations on the above proposal and requested for compensation
from the date of Commercial Operation Date (COD). CGM (MC)
clarified that no compensation can be allowed with a retrospective
effect and would be permissible only from the date of actual
implementation of the decision of the Ministry. If the
concessionaire did not consider this in conformity with the
agreement, he is free to take recourse to the dispute resolution
mechanism available in the contract agreement.

3. Amendment in Cl. 2.4 of the concession agreement

The existing provisions in Schedule ‘G’, Notes, para 3

would prevail in the Supplementary Agreement without any
modifications.”

In conclusion, it was decided that the draft supplementary agreement

be modified accordingly.

23. On 10 July 2006, the Supplementary CA was executed between

NHAI and JTR. The relevant clauses from the Supplementary CA
may be reproduced as under:
“AND WHEREAS as per the Gazette notification number S.O.
1466 (E), dated the 24th December, 2003, rates of base fee to be
recovered from the users of National Highway Number 4 from km
29.50 to km 62.00 were as follows:

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 16 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 Sl. Category of Vehicle Base fee Rate of Fee
No. per Vehicle per trip
(in Rupees per km)
(1) (2) (3)
1 Motor car, passenger van or jeep 0.40
2 Light Goods Vehicle (LGV) 0.70
3 Truck 1.40
4 Bus 1.40

AND WHEREAS on representations from locals, NHAI decided

that concessional rate shall be charged to the Local Personal
Traffic and the Concessionaire shall be compensated for the loss of
revenue incurred in extending concessions to the Local Traffic by
way of extension of Concession Period:

AND WHEREAS in consideration of the foregoing, it is deemed

necessary and expedient to enter into this Supplementary
Agreement to record the terms of approval of NHAI between the
Parties:

NOW, THEREFORE, IN CONSIDERATION OF THE

PREMISES AND THE MUTUAL COVENANTS
HEREINAFTER CONTAINED, THE PARTIES HERETO
HEREBY AGREE AND THIS AGREEMENT WITNESSETH AS
FOLLOWS:

1. The Parties hereto hereby agree that the following

definitions be, and are hereby deemed to be, included in
clause 1.1 of the Concession Agreement, dated the 28th
June, 2001.

Definitions:

“Local Commercial Traffic” means any commercial vehicle

including buses, trucks, light motor vehicles or taxis
engaged in carrying goods and passengers as plying
routinely on the project highway without crossing more
than one of the Toll Plazas.

“Local Personal Traffic” means and includes a personal

vehicle which is registered with the Concessionaire by any
person who normally resides or works at a place that can
normally be approached only by using a part of the Project
Highway and such person is, therefore, required to use such
vehicle for commuting on a part of the Project Highway,
without crossing more than one of the Toll Plazas, in the
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 17 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 course of normal travel to and from his place of work or
residence.

2. Terms of Agreement:

The Parties hereto hereby agree that

2.1 The Concessionaire shall not collect any fees from Local
Personal Traffic and Local Commercial Traffic in excess of the
following discounted rates, namely:

(a) Local Personal Traffic: Twenty five percent of the

applicable fee for the specific category of vehicle.

(b) Local Commercial Traffic: Fifty percent of the

applicable fees for the specific category of vehicle.

2.2 Clause 6.3 shall be revised as follows:

“The Concessionaire shall not collect any Fee in excess of

50% of the actual Fee from the local commercial traffic”.

2.3 The Concessionaire shall charge User Fee at the

concessional rate referred to in Clause herein above from the Local
Personal Traffic. The loss of revenue to the Concessionaire from
the implementation of this Supplementary Agreement i.e. after
issuance of the amended Gazette Notification shall be computed
for quantifying the total losses. For quantifying the loss of revenue
to the Concessionaire, NHAI shall form a committee and the
quantified loss shall be approved by the Competent Authority. The
Concession Period equivalent to the quantified loss shall be arrived
at in consultation with the Concessionaire and approved by NHAI
and the approved Concession Period shall be extended beyond the
Termination Date.

*****

2.5 In the light of the above, Schedule ‘G’ to the Concession

Agreement dated the 28th June, 2001, has been amended with
following modifications, namely :-

*****

(c) The following para have been added in the

Amended Schedule ‘G’, namely :-

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 18 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 I. The Concessionaire shall not collect any
fees from Local Personal Traffic and Local
Commercial Traffic in excess of the following
discounted rates namely:-

(a) Local Personal Traffic: Twenty-five

percent of the applicable fee for the specific
category of vehicle.

(b) Local Commercial Traffic: Fifty

percent of the applicable fees for the specific
category of vehicle.

*****

2.7 Other terms and conditions of the Concession

Agreement, dated the 28th June, 2001, shall remain as they
are, effective and in force.

2.8 This Supplementary Concession Agreement shall

come into effect from the date of its execution and shall be
coterminus with the validity of the Concession Agreement,
dated the 28th June, 2001, and shall expire on the
termination of the Concession Agreement, dated the 28th
June, 2001.”

24. On 11 July 2006, JTR wrote to the Project Director, NHAI,

clarifying that it had signed the supplementary CA without prejudice
to its right to claim compensation for losses suffered from the COD in
accordance with the CA.

25. In December 2006, M/s. EMA Unihorn (India) Pvt Ltd

(“EMA”, hereinafter) was appointed as IE in place of Zaidun Leeng
Sdn. Bhd.

26. On 2 January 2007, JTR wrote to the newly appointed IE under

Clause 39.1 of the CA, advancing, in brief, its submissions with

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 19 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 respect to the various issues which it had against NHAI, including
extension of time due to the transporters’ strike from 20 August 2004
to 29 August 2004 (as Issue 3), extension of time due to the Sand
Lorry Transporters’ strike from 20 June 2005 to 4 July 2005 (as Issue
4) and extension of time of 45 days as recommended by the earlier IE
(as Issue 5). Apropos these issues, the letter states thus:

(i) Re: Extension of time on account of the transporters’

strike from 20 August 2004 to 29 August 2004: Clause 29.6(c)
of the CA envisaged extension of the concession period by the
period for which collection of fees remained suspended on
account of the force majeure event occurring after the COD.
The IE, vide letter dated 18 October 2004 had acknowledged
that, owning to the transporters’ strike, there was a drop in
revenue collection for 8 days. Yet, he recommended relief to
JTR under Clause 29.7(b) and Clause 29.6(c) of the CA. The
Project Director, NHAI, on the file being marked to him, sought
the opinion of the Manager (Tech) as well as the IE. The
Manager (Tech), vide letter dated 16 September 2004
recommended extension of the concession period and advised
obtaining of a legal opinion on the meaning of the word
“suspension” in Clause 29.6(c) of the CA. JTR had referred the
matter to a Senior Advocate, who opined that JTR was entitled
to relief under Clause 29.6(c) and to extension of time of 5
days. The IE was, therefore, requested to examine the matter
and submit his recommendation to NHAI.

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 20 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 (ii) Re: Extension of time owing to the Sand Lorry
Transporters’ strike from 20 June 2005 to 4 July 2005: On this
score, JTR reiterated the submissions advanced in its earlier
communications. It was pointed out that the average collection

of toll from 1 June 2005 to 19 June 2005 was ₹ 6,52,786/- and

that toll collection had started dipping from 20 June 2005. The
total loss on account of strike, which qualified as an indirect

force majeure event, was ₹ 5,04,996/-. The Manager (Tech)

had further recommended extension of the concession period by

one day on account of the said strike.

(iii) Re: Recommended extension of 45 days on account of

the Transporters’ Strike in April 2003 and rains in October
2003: The IE had clearly recommended extension of the
concession period of 45 days on account of the transporters’
strike in April 2003 and the rains in October 2003. Clause
14.5(d) of the CA required the NHAI mandatorily to extend the
project completion schedule and the completion date in
accordance with the recommendation of the IE.

(iv) Re: Compensation for Concession provided to local

traffic after PCOD: On account of protest by the Local
Commercial Traffic (LCT) and by the Local Personal Traffic
(LPT), it was submitted that, since the COD, JTR had suffered

loss to the extent of ₹ 80,000/- per day. After detailed

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 21 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 deliberations and discussions, the supplementary CA had come
to be executed on 10 July 2006. It was requested that
admissibility of the JTR’s claim, in terms of the supplementary
CA, be allowed from the COD onwards and not merely
prospectively from the date of the supplementary CA.

The IE was, therefore, requested to recommend the JTR’s claims for

clearance of the above basis.

27. Apropos the above communications dated 2 January 2007 from

JTR to the IE, the IE wrote on 10 October 2007 to the Project
Director, NHAI, informing him that the JTR had submitted its claims
for the purpose of attempting an amicable resolution.

28. Vide communication dated 30 June 2009 addressed to the

Project Director, NHAI, the Manager (Tech) communicated approval
of the competent authority to the following revision of toll fee
chargeable with effect from 1 July 2009:

“NHAI/13011/20-CC/97-PI/33/122 Dated:30/06/2009
To

The Project Director,

National Highways Authority of India,
Project Implementation Unit,
Near JMIT, NH-4 (Km 201),
Chitradurga – 577 502
KARNATAKA

Tel: (08194) 223344

Sub: Western transport Corridor-Nelamangala-Tumkur

Signature Not Verified
O.M.P. (COMM) 185/2021 Page 22 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 Section of NH-4 from Km 29.5 to Km 62 in the State of
Karnataka – Revision of Toll Fees effective from 01.07.2008-
Reg.

Ref: Your letter no. NHAI/PIU-CTA/N-T/Toll

Cor./2009-10/06/396 dt. 08/06/2009

Sir,

Please refer to above regarding revision of toll fees

effective from 01.07.2009. The Competent Authority has
accorded approval for the following revised toll fee w.e.f.1st
July, 2009:

Category of vehicles CAR LGV Truck/Bus

Fee for the whole stretch 23 40 80
Fee for the traffic crossing 12 20 40
only one fee plaza
Fee for the local personal 3 5 10
traffic
Fee for the local 6 10 20
commercial traffic

Thanking you,

Yours Sincerely,
Sd.
(U.S. Prasad)
Manager (Tech.)
MC-III/KR Division”

29. JTR reacted to the above circular dated 30 June 2009 of the
NHAI revising toll fees vide communication dated 1 July 2009
addressed to the Project Director, NHAI. It was submitted, in the said
communication, that the revised rates of toll fees as recommended in
the circular dated 30 June 2009, were discrepant viz-a-viz JTR’s
proposal as well as the IE’s recommendations. It was pointed out that
the earlier decision of the NHAI was only to charge concessional rate
from LPT. No concession was given to LCT even in the

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 23 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 supplementary CA, which came to be signed on 10 July 2006. The
revised rates, as communicated vide circular dated 30 June 2009,
however, envisaged concessional toll rates being charged even from
LCT, which was neither part of the CA dated 29 June 2001 nor a part
of the supplementary CA dated 10 July 2006. Implementation of the
said rates, it was submitted would result in huge financial loss to the
JTR and would also be in violation of the CA. JTR was, therefore,
entitled to compensation on that account, as the loss was attributable
to the rates newly fixed by the NHAI.

30. On 9 July 2009, JTR wrote to the Manager (Tech), NHAI, again
pointing out that NHAI had, vide the supplementary CA dated 10 July
2006, approved charging of concessional toll fees only from LPT and
not from LCT.

31. Apropos the claims of JTR, a meeting took place in the

chambers of the Regional Officer of NHAI, on 24 February 2010, the
minutes of which read thus:

Date of Meeting: 24th February 2010

Participants: As per attached attendance list

S. Issues discussed Remarks

No.
1. The issue

The Concessionaire informed that

Concession is being provided to Local
Personal Traffic (LPT) in accordance
with Claus 2.3 of the Supplementary
Concession Agreement signed with
NHAI. He further stated that as per
Clause 2.3 of the Supplementary
Concession Agreement, NHAI has to
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 24 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 quantify the loss of revenue and
provide Extension for the Concession
period in order to recoup this revenue
loss.

IC Opinion

IC informed that they have been

working on this since September 2009
and have now reached a conclusive
stage. He informed that they have
completely gone through the data on
the number of registered vehicles with
the Concessionaire had several rounds
of meetings with the Concessionaire
and have now it has been agreed that
as of December 2010, the total number
of registered vehicles is 1491.

IC also informed that they have

checked in detail the data about Local
Personal Traffic logged in the toll
collection system software. This
logged in toll collection data has been
checked from April 2009 to January
2010. IC further informed that a
comprehensive report has been
prepared and submitted the report. IC
briefed the contents of the report, as
follows, to all those present.

(i) Documents the current method

used for classification of LPT by the
Concessionaire and its
merits/demerits.

(ii) Advocates for installation of

automatic number plate recognition
software for fully automating
classification of LPT so as to remove
the human interface.

(iii) Advocates a fully automated

method of classification of LPT and
thereby quantification of loss of
revenue. This is to make sure that the
quantified revenue loss is accurate.
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 25 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 (iv) The total loss of toll revenue to
the Concessionaire can be divided
into two components. The two
components are (a) from registered
vehicles paying toll fee, and (b),
from registered vehicles not paying
toll fee.

(v) The total average daily loss

from April 2009- January 2010 is of
the order of Rs. 12487.00 (Twelve
Thousand Four Hundred Eighty
Seven Only) per day. Of this total
Rs. 12487.00 loss per day. ₹ 4798.00
(Four Thousand Seven Hundred
Ninety Eight Only) is from LPT
vehicles paying toll and about Rs.
7689.00 (Seven Thousand Six
Hundred Eighty Nine Only) from
LPT not paying toll.

(vi) The Supplementary Agreement

provides for compensation of
revenue loss from registered vehicles
paying toll. Whereas, the
Supplementary Agreement is silent
on payment of compensation for
revenue loss due to registered
vehicles not paying toll.

During the meeting, IC expressed their

opinion the category of LPT vehicles
not paying toll, being registered
vehicles they may qualify for payment
of compensation of revenue loss.

Concessionaire’s Point

Concessionaire having heard the brief Concession

contents of the report confirmed that aire to
they are willing to upgrade the toll submit a
collection system software to be fully letter stating
automatic system by installation of by which
number plate recognition software. time they
would
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 26 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 upgrade the
toll plaza
system.

Concessionaire further informed that

instead of Extension of Concession NHAI to
Period beyond the Termination date take with
they would prefer monetary payment NHAI, HQ.
on a quarterly basis. This was to avoid
the effect of compounding.

Concessionaire requested that they are

putting all efforts to collect toll from NHAI to
registered vehicles not paying toll fee take up with
and hence requested NHAI to take NHAI, HQ.
compassionate view on this.

Client’s view

Regional Officer, NHAI, to this

request of the Concessionaire, NHAI,
responded saying that in order to make Regional
monetary payments on a quarterly Office to
basis, Clause 2.3 of the Supplementary decide/take
Concession Agreement has to be up with
amended. Regional Officer, NHAI NHAI,
concurred with the Concessionaire Head
request to make monetary payments Quarters
on quarterly basis. He said that he
would recommend for the amendment
of Clause 2.3 of the Supplementary
Concession Agreement to include
monetary payment on a quarterly
basis.

NHAI informed that they would have

to take up this issue with NHAI, Head
Quarters.

2.
Concessionaire’s point
NHAI,
Concessionare raised the issue of Rs. Regional
1.00 (One Only) revenue loss/vehicle Office to
incurred for the period from 1st July decide/take
2009 to 19th November 2009 due to up with
wrong estimation of toll fee done by NHAI,
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 27 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 NHAI, HQ and subsequent Head
instructions issued (NHAI letter No. Quarters
NHAI.13011/20-CC/97-P1/3/122
dated 30th June 2009). They further
requested that this revenue loss to be
compensated by monetary payment
rather than extension of Concession
Period.

IC Opinion

IC responded that is it true that there

was a wrong estimation/instruction
given to the Concessionaire regarding
fee to be charged for vehicles, NHAI
HQ subsequently, based upon the IC
recommendation, re-instructed the
Concessionaire with corrected user
fees to be charged vide their letter no.
NHAI/RO/BNG/2009 dated 19th
November 2009. As a result of the
above, Concessionaire has lost Rs.
1.00 per vehicle as toll fee for the
period from 1st July 2009 to 19th
November 2009.

IC further informed that they have

estimated this loss to be about Rs.
24,99,468.50 (Twenty Four Lakhs
Ninety Thousand Four Hundred Sixty
Eight and Paise Fifty Only). IC also
submitted the details of this estimation
that is given here as Attachment -1.

Client’s view point

Regional Officer, NHAI informed that

the Concession Agreement does not
provide for monetary payments.
However, he has agreed to take up this
issue with NHAI, Head Quarters,

3. A discussion took about the claims made by the

Concessionaire to date and the recommendations
made by the IC.
4. Claims 3 and 4 – Extension of time (i) NHAI to
th
due to Transporters strike 20 August decide
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 28 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 2004 to 29th August 2004, and (ii)
Sand Lorry Transports Strike 20th June
2005 to 4th July 2005.

Concessionaire’s point

Concessionaire informed that due to

the above strikes there are eligible for
9 and 1 number of days extension of
time as per Clause 29.6 c

Client’s view point

NHAI asked IC to confirm if there was

a drop-in the volume of tollable trucks
during this strike period.

IC opinion
NHAI to
IC informed that they have gone decide
through the traffic records and
confirmed that there has been a drop in
tollable trucks during the strike period.
They have estimated the extension of
time to be provided 5 and 1 days
against 9 and 1 number of days
claimed by the Concessionaire. The
recommendation of the IC has been
made to NHAI vide our letter ref.
EMAUNIHORNTMK/Claims/38
dated 10th Oct 2007.

Conclusion

NHAI checked this recommendation

and were agreeable to IC
recommendation.

Claim No. 5- Extension of time (i) due

to Transporters strike from 13.04.2003
to 23.04.2003 and (ii) due to heavy
rains in the month of October 2003.

Concessionaire’s point

Concessionaire informed that he is NHAI to

Signature Not Verified
O.M.P. (COMM) 185/2021 Page 29 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 entitled for extension of 45 days time decide
due to the above two force majeure
events under Clause 29.6 b of the CA.

Client’s view point

NHAI informed that as this FM event

had occurred prior to COD and COD
was not affected they are not eligible
for this Extension of Time.

IC opinion

IC informed that this issue has already

been conclusively looked into by the
previous IC viz. Zaidun-Leeng Sdn.
Bhd. & Artefacts Projects (JV). The
current IC concurs with the
recommendation made by the earlier
IC.

Conclusion

Client informed that they are of the

opinion that Concessionaire is not
eligible for any EOT. Further, NHAI
informed that if the Concessionaire is
not happy with this decision he may
take recourse to agreed dispute
resolution mechanism as per the
Contract Provision.

Claim No. 6– Compensation to the

Concessionaire for the Concessions NHAI to
provided to the Local Personal Traffic decide
COD

Concessionaire’s point
NHAI to
Concessionaire requested that he be decide
compensated for loss of revenue for
Concessions being provided to Local
Personal Traffic since COD. He stated
that the Concessions were provided
since COD. However, it took more
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 30 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 than two years to sign the
Supplementary Concession
Agreement.

Client’s view point

NHAI enquired IC opinion on the

above.

IC opinion

IC informed that the Concessionaire is

not eligible for any compensation prior
to the signing of Supplementary
Concession Agreement. Further, IC
substantiated their decision by quoting
the Minutes of meeting held on
05.05.2006 and attached with the
Supplementary Concession
Agreement. The minutes clearly
indicate that this issue was raised by
the Concessionaire during the signing
of the Supplementary Concession
Agreement. It was concluded that the
Concessionaire will be eligible for
compensation from the current date
i.e., signing of Supplementary
Agreement and notification thereof.
Further, the Concessionaire was
advised that if he thinks that this
decision is not in conformity with the
agreement he may take recourse to the
dispute resolution mechanism
available in the Contract Agreement.

32. On 5 March 2010, the IE submitted a report on the loss of

revenue suffered by JTR on account of concession granted to LPT.
The quantification of the revenue loss and estimated entitlement to
extension of the concession period, as worked out in the said report,
and the concluding recommendations therein, may be reproduced
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 31 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 thus:
“Quantification of Revenue Loss from June 2007 to March
2008 and April 2008 to March 2009 and estimated Extension of
Time

As no data is available with the Concessionaire from the toll plaza

system, IC has fallen back on the registered vehicle data for the
years 2007, 2008 and 2009 made available by the Concessionaire.

The registered number of vehicles with the Concessionaire for

various years is as given in Table No. 6.0

Table 6.0 Number of registered vehicles with the Concessionaire

for various years.

Year 2007-2008 2008-2009 2009-2010

Number of 537 944 1491
Registered Vehicle

It is suggested to estimate the revenue loss in proportion to the

number of registered vehicles. The same has been worked out and
is given hereunder in Table 7.0 hereunder.

Table 7.0 Estimated revenue loss and eligible number of days for
EOT

June 2007- April 2008- April 2009-

March March 2009 Jan. 2010
2008
Number of registered 537 944 1491
vehicles
% growth in registered -- 75.80% 58.00%
vehicles
Estimated revenue 4428.00* 7785.00* 12300.00**
loss/day due to LPT (in
Thousand)
Average daily toll 9,72,102.00 9,78,457.00 1,038,329.20
revenue (In
Thousands)
No of days of 0.1366 0.2386 0.355
Extension the
Concessionaire is
eligible for a month
No. of days Extension 1.366 days 2.863 days 3.55 days
the Concessionaire
eligible for year
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 32 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 Monetary payments 1,328,400.00 2,802,600.00 3,690,000.00
the Concessionaire is
eligible for the year
* Estimated ** Actual

9.0 Conclusion

9.1 IC having gone through the issue of loss of revenue due to

Concessions provided to LPT has come up with a methodology for
quantification of this revenue loss.

9.2 It is recommended that the Concessionaire switches to fully

automatic method of LTP classification as advocated in this report
by installation of number plate, recognition software and
integrating it with Toll Plaza Software.

9.3 It is recommended that the Concessionaire be given three

months time to change over from the present method of
classification of LPT to fully automatic method of classification.

9.4 IC has also estimated the loss of revenue to the

Concessionaire for the years June 2007-March 2008, April 2008-
March 2009 and April 2009-January 2010 to be of the order of Rs.
1,328,400.00 (Thirteen Lakhs Twenty Eight Thousand and Four
Hundred Only), 2,802,600.00 (Twenty Eight Lakhs Two Thousand
and Six Hundred Only) and Rs.3,690,000.00 (Thirty Six Lakhs and
Ninety Thousand Only) respectively.

9.5 IC has also estimated the number of days of extension for

the years June 2007-March 2008, April 2008-March 2009 and
April 2009-January 2010 to be as 1.36 days, 2.86 and 3.55 days
respectively. However, the compounding affect has not been
considered.”

33. On 15 May 2013, the IE addressed the following

communications to the Project Director, NHAI:

“Letter No: Unihorn-TMK/O&M(Tech)/636 15.05.2013

To,
Project Director,
Project Implementation Unit,
National Highway authority of India,
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 33 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 Km 201, NH-4 Near JMIT Campus.
CHITRADURGA-577 502.

Dear Sir,

Sub: Four laning of Nelamangala – Tumkur Highway

from Km 29.5 to Km 62.00 on BOT basis – Proposal for
User Fee Revision regarding.

Ref: JAS/NGP/UNIHORN/TUMKUR/23 dated 10.5.2013.

Please find enclosed the copy of the letter from M/s Jas
Toll Road Company Limited dated 10th May ‘2013,
regarding proposal for User Fee Revision as per
Concession Agreement. The revised User Fee calculation
as worked out by this office is attached as Annexure – I.
The Calculation attached in annexure – I is based on the
Provisional WPI for the month of March 2013 published
in the website http://eaindustry.nic.in as on 14.05.2013.
The WPI for March’ 2013, once finalised and published in
the website, the same shall be processed for approval by
the Competent Authority as it has to be published in local
papers 10 days in advance before implementation of
revision of fee by 1st July 2013.

Further, regarding concession to Local Personal Traffic,

we are following the directions of NHAI communicated
vide letter no. NHAI/RO-BNG/13027/4/2010/2166 dated
03.11.2011 received from DGM (Tech), RO, Bangalore.

Regarding Local Commercial Traffic, it is to state that the

concession to Local Commercial Traffic is not being
implemented by the Concessionaire as there is no direction
in the supplementary Concession Agreement for
compensation for loss of revenue to Commercial Traffic.
Hence, the Concession to Local Commercial traffic is not
being implemented by the Concessionaire till date and no
compensation is payable by NHAI on this account. In
view of the above, we are not recommending the
concessional rate to the Local Commercial Traffic.

Thanking you, Yours faithfully,

Sd.
(S. Harimurugan)
Team Leader
Tumkur Project”
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 34 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 (The annexures, to the aforesaid letter are not being reproduced, as
they are not strictly relevant to the dispute.)

34. Owing to agitations, which took place in the context of the

waters of Kaveri river, which continued from 4 September 2016 till 28
September 2016, traffic movement between Tamil Nadu and
Karnataka was badly affected, resulting in considerable reduction in
the toll collection on the Project Highway.

35. Accordingly, on 14 October 2016, JTR wrote to M/s Lion

Engineering Consultants, Tumkur, the newly appointed IE, stating that
the Kaveri water agitations amounted to force majeure, which entitled
JTR to relief under Clause 29.6(c) and 29.7(c) of the CA. The details
of the losses suffered by the JTR, it was submitted, would be
communicated as soon as they were computed.

36. Subsequently, under cover of a letter dated 19 January 2017,

JTR communicated the details of the tentatively affected revenue by
way of reduction in toll collection during the period 4 September 2016
to 28 September 2016 in a tabular form. It was submitted that
reduction in toll collection to the tune of ₹ 88,72,590/- was suffered in
September 2016, owing to the disturbance caused by the Kaveri
agitations. This, it was submitted, would entitle JTR to extension of 5
days in concession period which was, accordingly, sought.

37. Vide letter dated 10 April 2017, the Project Director, NHAI

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 35 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 forwarded details of the deliberations which had taken place and the
decisions arrived at till then on the various claims of JTR for further
considerations. Apropos the claims forming subject matter of the
present judgment, the letter communicated thus:

Claim No.3 Extension of Concession Period due to Transport

Strike from 20-08-2004 to 29-08-2004:

The Concessionaire M/s JAS Toll Road Co. Ltd, vide their letter
Dt.24-08-2004 (Copy enclosed at Annexure-15), intimated that,
All India Motors Congress has given to its call for Nationwide
Chekka Jam with effect from 20-08-2004 06.00 am onwards. As
per the letter Dt.30-09-2004 of the Karnataka Goods Transport
Association (Copy enclosed at Annexure-16) submitted by the
Concessionaire, states that the period of AIMTC strike was from
20-08-2004 08.00 am to 29-08-2004 08.00 am. On examination of
the revenue collection statement for the month of August 2004, it
was observed that the fee collection was adversely affected from
21-08-2004 to 28-08-2004 in comparison to the fee collected prior
to the strike period i.e. from 18-08-2004 to 20-08-2004 and
subsequent to the strike period i.e. from 29-08-2004 to 30-08-2004,
during which the average collection was Rs 5,69,033/- and Rs
5,52,388/- respectively as against the average collection for the
strike period of 21-08-2004 to 28-08-2004, which was
Rs.2,55,253/- (Copy enclosed at Annexure-17).

As per Clause 29.3(ii) of the Concession Agreement, Industry wide

or state wide or India wide strikes or Industrial action which
prevents collection of Fees by the Concessionaire for a period
exceeding a continuous period of 7 (seven) days in an Accounting
Year, Constitutes an Indirect Political Force Majeure Event.

The Concessionaire has claimed for Extension of Time of

the Concession Period or 8 days under Clause 29.6 (c) of the
Concession Period, which states that, "Where a Force Majeure
Event occurs after COD, the Concessionaire shall continue to make
all reasonable efforts to collect Fees, but if he is unable to collect
Fees during the subsistence of such Force Majeure Event, the
Concession Period shall be extended by the period for which
collection of Fees remains suspended on account thereof.

As per the directions of NHAI HQ as well as Regional

Office, NHAI, Bangalore, the Project Director NHAI, PIU,
Chitradurga approached M/s. Singhania & Partners, Bangalore for
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 36 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 legal opinion on the following queries:

1. Whether, Nationwide indefinite Chekka Jam by AIMTC

(Lorry Strike) qualify under Force Majeure Event as substituted
under Chapter VI of the Concession Agreement.

2. Whether, the time period of the Concession Agreement be

extended as subject to Clause 29.6 (c) of the Concession
Agreement with special emphasis to the term "Suspension" in it.

3. Whether, the Concessionaire is entitled for Compensation under

29.6 (d) of the Concession Agreement.

Replies for the above Queries from M/s. Singhania & Partners,
Bangalore:

1. M/s. Singhania & Partners, Bangalore opines that, while

industry wide or state wide or India wide strikes falls under Clause
29.3 of the Concession Agreement, which provides for Force
Majeure Event, they have clearly produced the meaning of
"prevent" as given by ‘Concise Law Dictionary by Ramanatha P
Aiyar of addition 2004 by Wadhwa & company Nagpur
Publications at Page No.660 and opined that, National wide
Indefinite Chakka Jam by AIMTS. (Lorry Strike) does not qualify
under Force Majeure Clause as defined under Chapter VI of the
Concession Agreement, as the Concessionaire was not prevented
from the collection of fees during the period of strike.

2. By Clearly furnishing the meaning of Suspension, as given

by Concise Law Dictionary, they opined that, the act to collect
toll/fees was not suspended and M/s JAS Toll Co Ltd continued to
collect the same. It was further clear that, it was just reduction in
traffic resulting in reduction in revenue which cannot be termed as
suspension, since the act of collecting toll was not suspended in
any manner and as such, the Concession Agreement cannot be
extended by virtue of Clause 29.6 (c) as it does not fall under the
purview of Force Majeure Clause 29.3 (ii) or any other sub Clause
under Article XXIX of the Concession Agreement.

3. Considering the conclusion drawn for above queries 1 & 2,

they opined that since, the events do not qualify under Force
Majeure Chapter of the Agreement Clause 29.6 (d) and Clause
29.7 (b) cannot be made applicable. A copy of the opinion of M/s
Singhania & Partners, Bangalore is enclosed at Annexure-18.

Rejecting these views of the M/s. Singhania & Partners,

Bangalore, the Concessionaire also obtained legal opinion from
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 37 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 Mr. Chidanandayya, Sr. Lawyer of Karnataka High Court, who
opined that, based on the definition of word “Suspension” in the
Black's Law Dictionary wherein, it was stated that, Suspension can
be temporary or permanent or can be for limited period or for long
period it may be for the limited vehicles or all the vehicles and
suspension is not restricted only to total suspension of collection of
Toll Fee and as there was Temporary Suspension of Toll Fee
Collection from lorries, suspension also comes within the purview
of Clause 29.6 (c) of the Concession Agreement.

Accordingly, Mr. Chidanandayya opined that, keeping in

mind that the average collection for the period of strike as 50% and
less than 50% and if the yard stick and purport of the Concession
Agreement is to be interpreted, he opined that, in his view, M/s.
JAS Toll Road Co Ltd is entitled to the extension of agreement for
a period of 5 Days and not 9 days, as there is no total suspension of
collection. A copy of opinion is enclosed at Annexure-19.

The Independent Consultant stated that, they have delivered

traffic records and confirmed that there has been a drop in tollable
tracks during the strike period and have estimated the Extension of
Concession Period to be provided as 4.33 Days as per Annexure-
20.

The CGM (Tech/RO NHAI Bangalore vide letter 06-02-

2012 (copy enclosed at Annexure-6), recommended that as per the
legal opinion of M/s Singhania & Partners on Claim No.3, the
Claim of the concessionaire does not qualify under the Force
Majeure Event and hence is not tenable, even though the Minutes
of Meeting held on 24-02-2010 at RO, Bangalore, in the
conclusion, it was mentioned that. NHAI checked this
recommendation and were agreeable to IC recommendation". The
Legal opinion furnished by M/s/ Singhania & Partners obtained by
NHAI and the legal opinion furnished by Mr Chidanandayya
obtained by the Concessionaire M/s JAS Toll Road Co. Ltd are
enclosed at Annexure-18 & 19 for kind perusal and ready
reference.

Claim No.4: Extension of Concession Period due to sand Lorry

Transporters Strike from 20-06- 2005 to 04-07-2005.

There was a strike called by Karnataka Lorry Owners

Association on 19-06-2005 and movement of all Truck carrying
sand and other building materials was stopped from 20-06-2005
and the same was called off on 04-07-2005.

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 38 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 As intimated by the Concessionaire, and as examined by
the Independent Consultant, the average collection from 01-06-
2005 to 19-06-2005, which was Rs.6,52,786/- got reduced to
Rs.6,20,634/- during the period 20-06-2005 to 04-07-2005 as per
the Annexure-21 enclosed.

As this claim is similar to Claim No.3 discussed in detail

above, while, NHAI/CGM viewed that the Claim cannot be
accepted, as it does not fall under Force Majeure Event as per the
opinion of M/s. Singhania & Partners, the Independent Consultant
opined that as there was a reduction in the collection during the
period of strike the concession period can be extended by 0.91
days say 1 (one) Day towards the above.

Claim No.5 Extension of Concession Period due to

Transporters Strike from 13-04-2003 to 23-04-2003 and due to
heavy rains in the month of October 2003.

The Concessionaire has claimed Extension of Concession

Period for 45 Days due to Transporters Strike in April 2003 and
heavy rains in October 2003 under Force Majeure Event in terms
of Clause 29.12 of the Concession Agreement.

The Project Director vide letter Dt. 10-11-2003 (Copy

enclosed at Annexure-22) intimated NHAI HQ that the event in
April 2003 qualifies as non Political Force Majeure Event for the
period from 13-04- 2003 to 23-04-2003 and similarly, heavy rain-
fall during October 2003 and has recommended for Extension of
Concession Period for 8 days only for approval of the Competent
Authority. The matter was discussed in the meeting of Variation
Committee held on 10-03-2004 at HQ and decided that as this
Force Majeure Event has occurred prior to COD and as COD was
not affected due to this Force Majeure Event, they are not eligible
for EOT and Competent Authority decided that the Concessionaire
should not be levied any penalty for delay of 42 days in completing
the works vide letter Dt.29-03-2004 of GM (MC-III) NHAI HQ,
New Delhi. A copy of the letter along with Minutes of Meeting of
Variation Committee held on 10-03-2004 are enclosed at
Annexure-23 for kind perusal. But, the Independent Engineer has
agreed for the proposal of EOT for 45 days, as recommended by
the previous IC M/s Zaidun Leeng SDN BHD, the Consultant's for
M/s. Artefact Projects vide their letter Dt 28-11-2003 enclosed at
Annexure-24 relying on Clause 29.6 (b) of the Concession
Agreement, which states that, "Where the Force Majeure Event
occurs before COD, the dates set forth in the Project completion
Schedule, and the Concession Period shall be extended by the
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 39 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 period of which such Force Majeure Event shall subsist’, and
Clause 14.5 (d) which states that, if Suspension of Construction
Works is for reasons not attributable to the Concessionaire, the
Independent Engineer shall determine any extension to the Project
Completion Schedule, the Scheduled Project Completion Date and
the Concession Period to which the Concessionaire is reasonably
entitled and shall notify NHAI accordingly. NHAI shall extend the
Project Completion Schedule, the Scheduled Project Completion
Date and the Concession Period in accordance with the
recommendations of the Independent Engineer”.

As per the Concession Agreement, the appointed date was

to be achieved on 23-06-2002 and accordingly, as per the
provisions of Clause 15.3, the Scheduled Project Completion date
was not later than 23.6.2004 and as the Concessionaire has
completed the project on 09-02-2004 and Provisional Completion
Certificate was issued on 10-02-2004 i.e. 4 months ahead of the
Scheduled Completion Date, NHAI opined that as the Completion
Date was not affected due to Force Majeure Event, NHAI, will
desist from recovering penalty for any delay in completion up to
42 days and decided accordingly in the Variation Committee
Meeting held on 10-03-2004. The Independent Consultant,
however, viewed that, had the Force Majeure Event not been there,
the Concessionaire could have completed the Project still earlier by
45 days and could have achieved the COD and commenced the
Tolling and as he could not do so due to the Force Majeure Event,
the Concessionaire is entitled for 45 days EOT in the Concession
Period.

However, as mentioned above, as the decision was already

taken by the Variation Committee in the meeting held on 10-03-
2004 on this claim, a review of the decision may be required in the
light of stand taken by the independent Consultants.

It is relevant to mention here that, even in the Meeting held

on 24-02-2010 (copy enclosed at Annexure-1) at RO, Bangalore, it
was concluded that, NHAI is of the opinion that, if the
Concessionaire is not happy with this decision, he may take
recourse to Dispute Resolution Mechanism as per the Contract
Provisions.

However, as the Concessionaire has already applied for

settlement under Clause 39.1 of the Concession Agreement, it is
recommended to settled the matter amicably by discussing with the
Concessionaire.

Claim No. 6: Compensation on account of Concession provided

Signature Not Verified
O.M.P. (COMM) 185/2021 Page 40 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 to the Local Traffic since COD:

The Toll Collection was started by the Concessionaire from 00.00

Hrs of 10-02-2004. As there was no concessional rate for the local
user in Schedule-G of the Agreement (User fee Notification), there
was resentment over this issue by local road users, stating that they
cannot pay for every trip.

The Concessionaire requested this office vide letter Dt.25-

03-2004 to take up the matter with the appropriate with authority
as the local commercial traffic have declared strike (Copy enclosed
at Annexure-25). The issue was taken up with the Secretary,
MORT&H by NHAI on 29-06-2004 and a meeting was held on the
issue on 05-05-2006 at NHAI HQ, New Delhi under the
Chairmanship of CGM (CM), where, it was decided that,
modification of Schedule - G regarding indicating user fee as on
December 2003 would be necessary and it was agreed that the
Project Director would publish a public notice by indicating actual
rates to be charged from the users with a particular date. It was
further agreed that a Supplementary Agreement should be signed
by the Concessionaire and the effective date of calculating loss to
the Concessionaire and compensation thereof should be made from
the date of signing of Supplementary Agreement and as per the
existing provisions of the Concession Agreement, the user fee to
be rounded off nearest to the one Rupee. A copy of the Minutes of
the Meeting held on 05-05-2006 is enclosed at Annexure-26.

Accordingly, a Supplementary Agreement was signed on

10-07-2006 (copy enclosed Annexure-27) and the Concessionaire
intimated vide letter Dt 11-07-2006 (copy enclosed at Annexure
28), that the Agreement has been signed without prejudice to his
right to his claim of compensation from day one i.e. from COD
onwards on the ground that they were losing toll collection from
day one. The Gazette Notification for concessional rate for local
Personal were issued on 04-05-2007 and published in local news
paper on 05-06-2007 and the Concessionaire started toll collection
from LPT as per the Notified rate. A copy of the Gazette
Notification issued is enclosed at Annexure-29.

As per Clause 2.3 of the Supplementary Agreement, the

loss of revenue to the Concessionaire from the date of
implementation of this Supplementary Agreement i.e. after the
issue of amended Gazette Notification shall be computed for
quantifying total losses to be determined in terms of the extension
of Concession period and it was agreed that, NHAI shall form a
committee for quantifying time and loss to be approved by
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 41 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 Competent Authority.

As per the Supplementary Concession Agreement, Local

Commercial Traffic means “any commercial vehicle including
Busses, Trucks, Light Motor Vehicles or Taxies engaged in
carrying goods and passengers as plying routinely on the Project
Highway without crossing more than one of the Toll Plazas”.

Local Personal Traffic means and includes a personal

vehicle which is registered with the Concessionaire by any person
who normally resides or works at a place that can normally be
approached only by using a part of the Highway and such persons
are therefore required to use such vehicle for commuting on a part
of the Project Highway, without crossing more than one of the Toll
Plazas, in the course of normal travel to and from his place of work
or residence.

As per the Supplementary Concession Agreement and the

Fee Notification, the user fee for local personal traffic shall be 25%
of the applicable fees and for the local commercial traffic user fee
shall be 50% of the applicable fees as provided in the Gazette
Notification Dt.24-12-2003.

As per the record notes of discussions held on 24.02.2010

at RO, NHAI, Bangalore, the modus operandi for the loss to the
Concessionaire due to LPT shall be based on the actual registered
local traffic recorded in the system duly verified by IC and NHAI
officials for the computation of loss as pr Clause 2.3 of the
Supplementary Agreement and the methodology to be adopted
shall be as adopted by M/s EMA Unihom India Pvt. Ltd., the then
IC and duly certified by Project Director, NHA Chitradurga vide
letter 26-03-2010. Copy of the record notes and letter of PD are
enclosed at Annexure-39.

As requested by DGM (Legal), NHAI HQ, New Delhi vide

letter Dt. 11-08-2011, M/s MV Kini & Co. New Delhi submitted
their opinion and clarification to the queries on Supplementary
Agreement, vide letter Dt 26-08-2011 and M/s MV Kini & Co.
opined that, the loss caused to the Concessionaire by way of
concession in user fee chargeable from local personal traffic and
local commercial traffic are reimbursable to the Concessionaire. A
copy of the letter of the DGM (Legal) and opinion submitted by
M/s MV Kini & Co are enclosed at Annexure-40 & 41.

The Independent Consultant has submitted a report on loss

of revenue due to concession granted to the Local Personal Traffic
clearly indicating the modus of computing the same and arrived at
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 42 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 the loss figures for the period from April 2009 to January 2010 and
as the data for the period from June 2007 to March 2009 was not
available with the Concessionaire, they have calculated the same
by considering the number of registered vehicles available in their
records for the period 2007-08, 2008-09 & 2009-10, they have
arrived at the percentage of increase in the number of registered
vehicles during this period as 75.80% in 2008-09 and 58% in
2009-10 and arrived at the loss to the Concessionaire trough Local
Personal Traffic through back calculation from the available
figures of 2009-10 by applying the percentage of increase in the
registered vehicles and arrived at the loss as Rs.13.28 Lakhs for
2007-08 and Rs. 28.08 Lakhs for 2008-09 and Rs.36.90 Lakhs for
2009-10 and number of days extension to which the
Concessionaire is entitle to was arrived at as 1.36 days for 2007-08
and 2.863 days for 2008-09 and 3.55 days for 2009-10 respectively
without considering the compounding effect. A copy of the report
submitted by the IC is enclosed for kind perusal (copy enclosed at
Annexure-30). It is relevant to mention here that, no quantification
of the Claim pertaining to local commercial traffic for which user
fee is to be charged at 50% of the applicable fee, has been received
from the Concessionaire.

In the meeting held at RO, Bangalore on 24-02-2010(copy

enclosed at Annexure-1), the Concessionaire insisted for payment
of compensation for loss of Personal Traffic since COD, but IC
informed that the Concessionaire is eligible for the same only from
the date of signing of Supplementary Agreement, as the
Concessionaire raised the issue only in the meeting held on 05-05-
2006 (copy enclosed at Annexure-26) at NHAI HQ and the same
was attached with the Supplementary Agreement. Further, the
Concessionaire was advised that if he thinks that, this decision was
not in conformity with the Agreement he may take recourse with
the Dispute Resolution Mechanism available in the Contract
Agreement.

The report submitted by the IC, on the compensation

payable to the Concessionaire for loss in the concession towards
concession extended to the Concessionaire on Local Personal
Traffic was deliberated in depth and the Concessionaire suggested
that, while Supplementary Agreement provides for compensation
for revenue loss from the registered vehicles paying toll, the
Supplementary Agreement is silent on payment of compensation
for revenue loss due to registered vehicles not paying toll and
suggested that they also qualify for payment of compensation of
revenue loss.

The Concessionaire having heard brief content of the report

Signature Not Verified
O.M.P. (COMM) 185/2021 Page 43 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 confirmed that, they will upgrade the toll collection system
software to be fully automated system by installation of “number
recognition software”. The Concessionaire, further informed that,
instead of extension of concession period beyond the termination
date they would prefer mandatory payment on quarterly basis as
this would avoid the effect of compounding.

The Concessionaire, further requested that they are putting

all the efforts to collect toll from registered vehicles not paying toll
fee and NHAI to take a compassionate view to pay compensation
on this.

RO NHAI-Bangalore, responded to the request of the

Concessionaire to make mandatory payment on quarterly basis by
amending Clause 2.3 of Supplementary Agreement by taking into
issue with a HQ and draft amendment made in this regard along
with a copy of the Minutes of the Meeting held on 24-02-2010 are
enclosed at Annexure-1 & 31.

The communication regarding approval of this amendment

and formation of a Committee for quantifying the loss of revenue
to the Concessionaire through approval of the Competent
Authority, no information is available in this regard in this office
regarding approval of these two proposals.

Once, these two proposals are approved and the

quantification of losses to the Concessionaire due to Concession
extended to the local personal traffic is completed, the payment of
compensation to the Concessionaire against this claim can be
complied with.”

38. On 15 May 2017, JTR issued a notice under Section 21 of the

1996 Act, seeking reference of the disputes with NHAI to arbitration.

39. On 21 June 2017, JTR wrote to the IE and to the Project

Director, NHAI, referring to the loss of revenue suffered by it, owing
to concessional toll fees charged from LPT and LCT, beyond the
purview of the CA and the Supplementary CA. Annexed to the letter
was a detailed computation of the revenue losses stated to have been
suffered by JTR from July 2007 to May 2017. It was stated, in the
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 44 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 said letter, that the computation was done, “as per the prevailing
traffic scenario and in accordance with the supplementary agreement”
as well as the compounding effect thereof. JTR claimed a total period
of 421.8 days extension in the concession period across both Toll
Plazas.

40. By consent of parties, the learned Arbitral Tribunal, consisting

of three learned members, came to be constituted on 31 May 2017.

41. Statement of Claim (SOC) was filed by the petitioner before the
learned Arbitral Tribunal on 11 September 2017, along with exhibits
number Ex. C-1 to C-88. Of these, Ex. C-26C was the covering letter
dated 21 June 2017 1 , whereunder JTR had claimed a total of 421.8
days extension in the Concession Period. However, in computing the
period of extension of Concession Period, for the purposes of Claim 4,
JTR added, to the period of 421.8 days extension sought for the losses
suffered between July 2007 and May 2017, additional extension of the
Concession Period for not having been able to collect toll during the
881 days from the date of the PCOD (10 February 2004) till the date
of the execution of the Supplementary CA (10 July 2006). Claims 2,
4 and 5 in the SOC alone are being considered in this judgment. They
read thus:
Claim Claim
No.
2 Extension of Concession Period due to
a) Transporter strike from 13th April 2003 to 23rd
April 2003, and
b) Due to heavy rains in the month of October 2003.

1
Refer para 39 supra
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 45 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 Extension of the Concession Period by 45 days
4 Extension to the Concession Period due to concession
provided to Local Personal Traffic & Local Commercial
Traffic:
a) Compensation towards concession provided to
Local Traffic (LPT & LCT) since COD.
b) Compensation towards concession provided to
Local Traffic (LPT & LCT) from signing of
Supplementary Agreement and notification
threof:
Extension of the Concession Period by 3 years (1095
days)
5 Extension of the Concession Period due to
i. Transport Strike from 20th August 2004 to 29th
August 2004
ii. Sand Lorry Transporters strike from 20th June
2005 to 4th July 2005
iii. Kaveri Water issue between the State of
Karnataka and Tamil Nadu causing reduction in
Toll collection in all type of Traffic from
adjoining States.
Extension of the Concession Period by 15 days

42. Statement of Defence (SOD) was filed by NHAI on 12 January

2018 and rejoinder was filed by JTR on 23 February 2018. The SOC,
SOD and rejoinder were all taken on record by the learned Arbitral
Tribunal in its 2nd meeting on 18 March 2018.

43. I may note, here, that, though NHAI has sought to contend that
the first computation of the period of extension of the Concession
Period, as claimed by JTR, was filed by JTR only in July 2018 and
has, in fact, sought to refer to this computation as “the July 2018
computation”, covering the period July 2007 to May 2017, this does
not appear to be factually correct. The first computation of the
claimed extension of Concession Period, for the period July 2007 to
May 2017, was in fact filed as Exhibit 26-C with the SOC and finds
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 46 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 specific mention in paras 47 and 48 of the SOC. The SOC was filed
under cover of letter dated 11 September 2017, and was taken on
record by the learned Arbitral Tribunal in the second hearing on 18
March 2018. The repeated reference, by NHAI, to July 2018 appears,
therefore, to be incorrect.

44. One may proceed directly to the minutes of the 24th and 25th
hearings of the learned AT, dated 8 and 9 August 2019, which
recorded as under:
“1.0 The Learned Counsel for the Claimant resumed the
arguments with regard to Claim number 4 and tried to explain as to
how the computations were done to assess the loss of revenue for
LPT and LCT vehicles. In this connection, attention was invited to
Engineer’s letter dated 26.08.2011 wherein the Engineer had
worked out the loss at TP-1 and TP-2 and added the two values to
come to the total loss of revenue which was divided by the total
revenue per day to arrive at the loss of number of days for being
compensated. The Counsel for the Claimant also invited attention
of AT to Ex. R-7 which is Schedule-M for monthly fee collection.
The AT considered this matter and felt that the computation
process adopted by the Engineer was prima facie in order and the
same should be adopted to work out the total loss of revenue
divided by the total revenue for both the Toll Booth’s together.
Accordingly, without prejudice to the rights and contentions of
both the parties, the Claimant is directed to be re-work out their
claim suitably.

2.0 The Claimant’s case has been submitted up to the year

2017. They are advised to update their claim for 2018 and 2019
based on the actual data.

3.0 The AT felt that as a sample test case, the Independent

Engineer to check the record for the month of June, 2019 to assess
the LPT and LCT vehicles actually passing through TP-1 and TP-
2. The IE should also assess the corresponding revenue for these
two toll booths for the month of June, 2019. This is without
prejudice to the rights and contentions of both the parties.

4.0 The above data the submissions may be made available to

the AT on or before 20th August, 2019.
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 47 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 45. In compliance with the directions contained in para 3.0 of the
afore-extracted order passed by the learned AT in the 24th and 25th
Hearings, MSV International Inc., the newly appointed IE submitted,
under cover of its letter dated 16 August 2019, details of the number
of vehicles which actually passed through the Toll Plazas TP-1 and
TP-2 in June 2019, and filed the report before the learned AT on 31
October 2019.

46. In compliance with the direction contained in para 1.0 of the

order passed by the learned AT in its 24th and 25th Hearings held on 8
and 9 August 2019, JTR submitted, on 23 August 2019, a fresh
computation of the number of days of extension of the Concession
Period being claimed by it for the period July 2007 to May 2017, as
well as additional extension of the Concession Period claim for the
period June 2017 to June 2019, as advised by the learned Arbitral
Tribunal in para 2.0 of the Minutes of the Hearing held on 8 and 9
August 2019. The number of days of extension of the Concession
Period claim for the loss of revenue during the period July 2007 to
May 2017 was reduced to 204.3 days, as against 1095 days claimed in
the SOC. The additional period of extension of the Concession
Period, claimed for the loss of revenue during June 2017 to June 2019,
was 94.2 days.

47. Final arguments were concluded, before the learned Arbitral

Tribunal during its 36, 37 and 38 hearings, conducted on 11 and 12
January 2020. The following order was passed on the said date:
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 48 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 “1. List of Attendance of parties is attached herewith.

2. Learned Counsel for the Claimant started his Rejoinder

arguments and concluded the same. However, the detailed
calculations in support of Claim No. 4 (claim pertaining to Local
Personal Traffic and Local Commercial Traffic) will be filed by
the Claimant within 2 weeks with advance copy to the Respondent,
who may reply appropriately within 2 weeks thereafter.”

(The order recorded, thereafter, the list of decisions cited by JTR.)

48. Purportedly in compliance with the directions issued by the

learned Arbitral Tribunal in the afore-extracted order dated 11 and 12
January 2020, JTR filed a fresh calculation of the number of days of
extension of the Concession Period that it was claiming, including,
this time, additional claims for the period 1 July 2004 to June 2007
and July 2019 to June 2021, claiming 72.04 days and 58.43 days
extension in the Concession Period for these two spans of time. The
computation was submitted under cover of the following
communication dated 26 January 2020, addressed to the learned
Arbitral Tribunal:
“Dear Sir(s),

This is in compliance of the directions issued by this Ld. Tribunal

by way of the minutes of the meeting under reference. Vide the
said Order, this Ld. Tribunal had been pleased to direct the
Concessionaire/Claimant before the Ld. Tribunal to details
calculations in support of Claim No. 4 (claim pertaining to Local
Personal Traffic and Local Commercial Traffic). In furtherance
thereof, the same is attached herewith and the explanation thereto
is as under:

1. In order to compute the loss suffered by the

Concessionaire on account of concession provided to LPT
and LCT, the claimant hearin his placing reliance upon the
Average Growth Rate (AGR) achieved in the project in
question along with the IE’s report dated 17th September,
2090 as provided in compliance of the Minutes of meeting
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 49 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 dated 8th and 9th August, 2019.

2. The AT with a view to validate Concessionaire’s

Claim for Extension of Concession Period on account of
lossess to the Concessionaire due to concession/discounted
rates approved by NHAI in accordance with Supplementary
Agreement, AT had passed the following directions in the
24th and 25th hearings dated 8th and 9 August 2019:

“AT felt that as a sample test case, the Independent

Engineer check the record for the month of June,
2019 to assess the LPT & LCT vehicles actually
passing through TP-1 and TP-2. The IE should also
assess the corresponding revenue for these two toll
booths for the month of June 2019.”

3. In response thereto, the IE had assessed and

submitted its report dated 17th September, 2019. Vide the
said report, the IE has assessed the actual average trips per
day for LPT as well as LCT for the month of June, 2019.
Accordingly, the concessionaire/Claimant worked out the
percentage trip of LPT and LCT vehicles, which comes out
to 64% for LPT and 36% for LCT vehicles. (Copy of the
same is attached herewith for ready reference)

4. On the basis of the said report, the Concessionaire

has calculated the average loss per day being suffered by
the Concessionaire in the month of June, 2019 on account
of the concession/discount provided to the LPT and LCT
vehicles. For the said purpose, the Concessionaire firstly
took the actual Toll Rate for crossing one toll plaza which
was liable to be paid by a particular category of vehicle and
thereafter, subtracted the Applicable Rate after discount
which was prescribed by the NHAI in furtherance of the
Supplementary Agreement to arrive at the loss being
suffered by the Concessionaire for each such trip. The said
figure was multiplied with the number of trips in the
particular category as provided for in the IE’s report. By
following the said procedure, the average daily loss being
suffered by the Concessionaire in the month of June 2019
comes to an amount of ₹ 1,78,450/ – for LPT and LCT
vehicles (for LPT ₹ 111600/– and for LCT ₹ 66445/–). The
detailed calculation in that regard is reflected in Sheet A of
the Excel File attached herewith. The Toll Notification
issued by NHAI for the relevant period is also attached
herewith.

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 50 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 5. For the purposes of computing the Revenue Growth
Rate, the Concessionaire has calculated the percentage
difference (increase/decrease) in the toll collection for the
entire project (i.e. TP-1 as well as TP-2) for the year 2004-
05 and the year 2005-2006. Similarly, the percentage
difference in the toll collection for each year from 2004
onwards till the year 2018-19 was calculated and thereof
work out of the Average Growth Rate (AGR) for the
project i.e. 10.26%. The same is reflected in the Sheet B
of the Excel File attached herewith.

6. Lastly, on the basis of the average per day loss

being suffered by the Concessionaire in the month of June,
2019 (Sheet A) read with the AGR of 10.26% (Sheet B),
the Concessionaire has done back calculation and forward
calculation to arrive at the Average per day loss being
suffered by the Concessionaire for each year since 2004 till
2021. The same is reflected in Sheet C of the Excel File
attached herewith.

7. As can be seen from a perusal of the Sheet C of the

Excel File attached herewith, the Concessionaire has
thereafter divided the average loss per day for each year
with the average daily toll collection per day in order to
arrive at the average per day extension of time which the
Concessionaire is entitled to for that particular year.

8. On the basis of the said calculation, the

Concessionaire has arrived at a grand total of 414 days of
extension which the Concessionaire would be entitled to on
the basis of the methodology and the formula adopted in
the present approach.

9. This is in addition to the submissions of the

arguments advanced by the Concessionaire during the
course of the Arbitration Proceedings before this Learned
AT.”

49. On 25 February 2020, NHAI wrote to JTR, requesting JTR to

attend an inspection of the Toll Plazas, with relevant
documents/information to support the computation submitted by JTR
on 26 January 2020.

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 51 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 50. On 27 February 2020, NHAI again wrote to JTR, informing it
that, in order to verify the data contained in the servers at the Toll
Plazas, NHAI had visited the Toll Plazas on 26 February 2020, along
with JTR’s representative and an expert. However, the server was so
slow that it was not possible to download the data even after three to
four hours. NHAI, therefore, requested JTR to call its toll expert to
download the data from the server. JTR, however, informed that its
toll expert was on leave and would be available only after a week.
Even after requesting JTR to avail the services of the software service
provider, located in Bangalore, the requisite data could not be sourced
or downloaded. NHAI, therefore, again visited the Toll Plaza on 27
February 2020, on which date JTR reported that the server was not
working and that it was not possible to obtain the data, and also
provided a report to that effect from the IE. NHAI, therefore,
intimated JTR that, in the circumstances, the learned Arbitral Tribunal
would be requested to disallow JTR’s claim.

51. Vide email dated 18 March 2020, NHAI informed the learned
AT of the above developments. In their light, NHAI submitted as
under, with respect to the calculations submitted by JTR on 26
January 2020:
“Sir,
*****

In view of the above circumstances, it is amply clear that the

claimant is shying away from sharing the data. As a result of,
respondent is not in position to verify anything, in absence thereof,
detailed calculations provided by the claimant are nothing but
manipulated and completely false. Furthermore, the calculations in
absence of being tested at the anvil of cross-examination (as being
produced subsequently post the final arguments), no relevance
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 52 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 could be attached to the calculations. Furthermore, in view of the
above circumstances, the genuineness and veracity of the
calculations are doubtful. As a result of, no reliance whatsoever
could be placed on the aforesaid calculations for the purposes of
adjudication of claim no. 4. It may also be noted that even earlier
calculations filed claimant on record of this Tribunal have not
inspired any confidence, as such, claimant has filed the
calculations (at this stage) is nothing but an attempt to cure the
lacunae in its case.”

52. As no response was received from the learned AT, NHAI, on 7

May 2020, filed an application before the learned AT, seeking recall
of the order dated 12 January 2020, passed by the learned AT and
striking off, from the record, of the calculation submitted by JTR on
26 January 2020, for the following reasons:

(i) JTR had filed its SOC in September 2017,

unaccompanied by any calculations supporting Claim No. 4.

(ii) Almost a year after filing of the SOC, JTR, on 6 August

2018, filed documents purportedly containing calculations for
Claim 4. In the calculations, JTR sought extension of the
Concession Period by 1095 days.

(iii) Thereafter, in the calculations subsequently filed on the

calculations subsequently filed on 23 August 2019 (Ex. C-102),
JTR sought extension of the concession period, for the losses
suffered between July 2007 and May 2017, by 204.32 days.

(iv) Introducing claims in respect of periods both before and

after July 2007 and May 2017 respectively, JTR, after
arguments had been concluded and award reserved, filed a fresh
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 53 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 set of calculations on 26 January 2020, in which it sought
extension of the Concession Period by 414 days for the losses
allegedly suffered between 2004 and 2021.

(v) The claim for extension in the Concession Period now

sought for the losses allegedly suffered between 1 July 2004
and 30 June 2007 were never claimed in the SOC or in any of
the calculations filed earlier during the course of the arbitral
proceedings. No application, seeking leave of the learned
Arbitral Tribunal to include a claim for the said period was ever
moved by JTR.

(vi) Similarly, the new calculations also computed an

extension of the Concession Period for the period 1 July 2092
30 June 2021, with no calculations ever having been filed for
the said period till 26 January 2020, thereby amending the
original SOC.

(vii) The calculations dated 26 January 2020 introduced an

entirely new methodology, never either pleaded or argued.
New concepts such as Revenue Growth Rate, Average Growth
Rate, back calculations and forward calculations had been
introduced. No leave had been sought, from the learned
Arbitral Tribunal, to introduce such a new methodology or
concepts never earlier argued or pleaded.

The learned Arbitral Tribunal was, therefore, requested to decide the

dispute on the basis of the data available with it as on 12 January

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 54 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 2020, and to strike, off the record, the calculations submitted by JTR
on 26 January 2020.

53. On 15 May 2020, JTR filed a reply to the above application of

NHAI. JTR contended that the calculations submitted by it on 26
January 2020 were as per the liberty granted by the learned Arbitral
Tribunal in its order dated 12 January 2020, against which no
objection was raised by NHAI either then, or thereafter. Though JTR
filed the mathematical calculations regarding its claim on 26 January
2020 in accordance with the liberty so granted, NHAI had failed to
file its reply. As such, no violation of the principles of natural justice
could be pleaded. No case for recall of the order dated 12 January
2020, therefore, existed. It was also contended that the NHAI was
essentially seeking a review of the said order, which could not be
sought in the garb of an application seeking recall. Having failed to
file any response to the calculations filed by JTR on 26 January 2020
for nearly four months, NHAI, it was submitted, could not, by the
application dated 7 May 2020, seek recall of the order dated 12
January 2020. In para 9 of its reply, JTR submitted that it had “only
filed an arithmetical calculation to assist this learned Arbitral Tribunal
by providing another alternative, which may be adopted in order to
compensate the claimant for the losses which it admittedly has
suffered”. If NHAI was of the view that the said computation was not
in order, it had every opportunity to suggest an alternative, which it
had failed to do. Without prejudice, it was submitted that, while the
discretion to accept or reject the computation suggested by JTR on 26
January 2020, vested with the learned Arbitral Tribunal, there could
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 55 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 be no question of taking the calculation off the record. It was
submitted that it was much after the period of two weeks, from the
date of submission of the said calculation had expired, that NHAI, on
25 February 2020, sought access to the server of JTR, to extract data
19 pertaining to the period May to July 2019. No order, requiring the
JTR to provide the said data to NHAI, had been passed by the learned
Arbitral Tribunal. The order dated 8 and 9 August 2019 , passed by
the learned Arbitral Tribunal, had acknowledged the correctness of the
manner in which the IE had computed the loss suffered by JTR and,
on that basis, worked out the number of days by which JTR was
entitled to extension of the concession period. In its submissions
dated 26 January 2020, JTR had merely followed the same
calculation, by extrapolating, for the entire period in dispute, the
overall number of vehicles passing the two toll booths per day,
worked out on the basis of the letter dated 16 August 2019 of the IE,
which set out number of vehicles who had passed two toll booths in
the month of June 2019. It was not, therefore, as though the JTR had
acted on entirely new data or proceeded on a method alien to those
which had already been disclosed to the learned Arbitral Tribunal.

54. In so far as the objection of NHAI to the effect that the

calculation submitted by JTR on 26 January 2020 covered periods in
excess of the periods covered by the earlier calculations submitted by
JTR, attention was invited to the wording of Claim no. 4, which
clearly envisaged two periods for which JTR was claiming
compensation; the first being from the date of the PCOD till the date
of the supplementary CA, and the second being from the date of
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 56 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 supplementary CA till the end of the concession period. NHAI could
not, therefore, seek to suggest that the claim was to be computed only
from July 2007.

55. For all these reasons, JTR submitted that the recall application
of NHAI was completely without bereft of merit.

56. On 22 May 2020, the representatives of NHAI once again

visited the toll plazas to verify the server data. JTR was requested to
generate the complete data for the period 2007 to 2017, but submitted
that it was not possible to furnish the said data. JTR submitted that the
data that was available was only from 2017 onwards. Even for the
period after May 2017, data was provided to the NHAI only for the
dates 12 May 2019, 10 January 2020, 11 January 2020 and 22
February 2020. No other data could be downloaded.

57. Subsequently, further written submissions were filed by NHAI

before the learned Arbitral Tribunal on 9 June 2020 in which, with
respect to the data provided for the dates 12 May 2019, 10 January
2020, 11 January 2020 and 22 February 2020, it was pointed out, in
para 80, that no transaction of LPT or LCT was found to have taken
place, meaning that no concession had ever been granted by JTR
under the said categories. That apart, it was submitted that, if JTR
could provide the server data for the said four dates, there was no
reason why it could not provide the data for the remaining period of
2007 to 2017.

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 57 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 58. The impugned judgment came, thereafter, to be delivered on 31
December 2020.

59. OMP (COMM) 185/2021 preferred by NHAI under Section 34

of the 1996 Act, assails the award dated 31 December 2020. By
consent of the parties, arguments had been heard on the sustainability
of the impugned award qua Claims 2, 4 and 5, as learned Counsel
submitted that the decision with respect to these claims would be
pivotal in deciding the merits of the impugned award on the remaining
claims.

60. I proceed to deal with the controversy, and return my findings,

claim-wise.

Scope of interference with arbitral awards under Section 34 of the

1996 Act

61. Section 34(2)(a)(iv) of the 1996 Act, as it stood prior to its

amendment by the Arbitration and Conciliation (Amendment) Act
2016, expressly envisaged interference with an arbitral award, insofar
as the merits of the award were concerned, only where
(i) the award dealt with a dispute which was not
contemplated by, or falling within the terms of the submission
to arbitration or
(ii) the award contained decisions on matters beyond the
scope of the submission to arbitration.

Apart from this, the only other provision which envisaged interference

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 58 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 with an arbitral award, on the merits of the award, was Section 34
(2)(b)(ii), which permitted such interference where the arbitral award
was “in conflict with the public policy of India”. In this regard, the
explanation to the said clause clarified that an award would be treated
as in conflict with the public policy of India if
(a) its making was induced or affected by fraud or
corruption,
(b) the award was violative of Section 75 2 or
(c) the award was violative of Section 81 3 of the 1996 Act.

62. However, the Explanation was specifically “without prejudice

to the generality of” Section 34(2)(b)(ii). The generally wide scope
and ambit of the expression “public policy of India” was not,
therefore, compromised by the Explanation. The scope of interference
with arbitral awards, on merits, under the pre-amended Section 34
had, therefore, to be restricted to cases where the award was in
conflict with the “public policy of India”. In this regard, guidelines
are to be found in the judgments of the Supreme Court in ONGC Ltd.
v. Saw Pipes Ltd 4 and Associate Builders v. DDA 5. Both these
decisions advocate a wide interpretation of the expression “public
policy of India”. Read together, they hold that an arbitral award would
be contrary to the public policy of India if it was (i) contrary to
fundamental policy of Indian law or (ii) contrary to the interest of
India or (iii) contrary to justice or morality or (iv) patently illegal.
2
Section 75 requires matters relating to conciliation proceedings to be kept confidential.
3
Section 81 proscribes reliance upon, or introduction as evidence, in arbitral or judicial proceedings, of, inter
alia, suggestion, admissions and proposals, in conciliation proceedings. Breach of these clauses would,
therefore, result an arbitral award being in conflict with the public policy of India.
4
(2003) 5 SCC 705
5
(2015) 3 SCC 49
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 59 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 63. Thus was introduced, by judicial fiat, the concept of patent
illegality, as a ground to interfere with an arbitral award, though the
said ground did not find express place in Section 34 as legislatively
enacted.

64. “Patent illegality” was also regarded as a ground for interfering

with arbitral awards in McDermott International Inc. v. Burn
Standard Co. Ltd. 6 and DDA v. R.S. Sharma & Co7. McDermott6
held that, if the arbitrator had “gone contrary to or beyond the express
law of the contract or granted relief in the matter not in dispute, the
award would be “patently illegal”. R.S. Sharma7 further widened the
expression by holding that an award which was
(a) contrary to substantive provisions of law, or
(b) contrary to the provisions of the Arbitration and
Conciliation Act, 1996, or
(c) against the terms of the respective contract, or
(d) patently illegal, or
(e) prejudicial to the rights of the parties,
(f) would be vulnerable to interference under Section 34(2).

65. “Patent illegality”, therefore, unquestionably visits an award

which is contrary to the contract between the parties. This is but
obvious, as the arbitral tribunal is a creature of the contract between
the parties, and it is well settled that no court, or other judicial or

6
(2006) 11 SCC 181
7
(2008) 13 SCC 80
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 60 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 quasi-judicial authority, can go behind the contract, or statute, to
which it owes its existence.

66. The Arbitration and Conciliation (Amendment) Act, 2016

introduced, with effect from 23 October 2015, Explanations 1 and 2 in
Section 34(2) and sub-section (2A) in Section 34 of the 1996 Act.
These provisions read thus:
“Explanation 1. – For the avoidance of any doubt, it is
clarified that an award is in conflict with the public policy of
India, only if, -

(i) the making of the award was induced or affected by

fraud or corruption or was in violation of section 75 of
section 81; or

(ii) it is in contravention with the fundamental policy of

Indian law; or

(iii) it is in conflict with the most basic notions of morality

or justice

Explanation 2. – For the avoidance of any doubt, the test as

to whether there is a contravention with the fundamental
policy of Indian law shall not entail a review on the merits of
the dispute.

(2A) An arbitral award arising out of arbitrations other than

international commercial arbitrations, may also be set aside
by the Court, if the Court finds that the award is vitiated by
patent illegality appearing on the fact of the award.

Provided that an award shall not be set aside merely on

the ground of an erroneous application of the law or by
reappreciation of evidence.”

67. By this amendment, the legislature departed, somewhat, from

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 61 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 the view expressed, in the decisions cited hereinabove, with respect to
the scope of expression “public policy of India”. The expression
“public policy of India” was, by Explanation 1, restricted only to cases
where the award was
(i) induced or affected by fraud or corruption,
(ii) violative of Section 75,
(iii) violation of Section 81,
(iv) in contravention with the public policy of Indian law, or
(i) in conflict with the most basic notions of morality or
justice.

Thus, a new expression “fundamental policy of Indian law” came to

be introduced in Section 34, while entering a note of caution that, in
examining whether the award was in contravention with the
fundamental policy of Indian law, the court would not review the
merits of the dispute.

68. “Patent illegality” was engrafted as a separate ground to vitiate

an award, by Section 34(2A), but was not included within the ambit of
the expression “public policy of India”. Thus, “patent illegality”
continued to remain a ground for a valid challenge to an arbitral award
and, in addition, the award was also liable to be interfered with, if it
was found to be in contravention with the fundamental policy of
Indian law.

69. Eight decisions, rendered in the context of the amended Section

34, are of relevance. They are Ssangyong Engineering &

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 62 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 Construction Co. Ltd. v. NHAI 8, South East Asia Marine
Engineering & Constructions Ltd. (SEAMEC) v. Oil India Ltd. 9,
Project Director, NHAI v. M. Hakeem 10, State of Chhattisgarh v. Sal
Udyog Pvt. Ltd.11, NHAI v. P Nagaraju12, Delhi Airport Metro
Express Pvt. Ltd. v. Delhi Metro Rail Corporation Ltd.13, P.S.A.
Sical Terminals Pvt Ltd v. Board of Trustees 14 and I.O.C.L. v. Shree
Ganesh Petroleum 15.

70. Ssangyong8 held, inter alia, that an arbitral award was

susceptible to interference on the ground that it had overlooked an
issue of importance if the issue was such that, had it been dealt with,
the whole balance of the award would have been altered and its effect
would have been different. SEAMEC9, even while endorsing the
view propounded in earlier decisions, that the mere possibility of an
alternative interpretation to the contractual covenants, different from
that accorded thereto by the arbitral award, would not constitute a
legitimate basis to interfere therewith, held, significantly, that the
Section 34 court was justified in examining “whether the
interpretation provided to the contract in the award of the tribunal was
reasonable and fair, so that the same passes muster under Section 34
of the Arbitration Act”. “Reasonability” and “fairness” in the manner
in which the Arbitral Tribunal had interpreted the contractual
covenants, thereby, became a relevant consideration, for the Section

8
(2019) 15 SCC 131
9
(2020) 5 SCC 164
10
(2021) 9 SCC 1
11
(2022) 2 SCC 275
12
2022 SCC OnLine SC 864
13
(2022) 1 SCC 131
14
2021 SCC OnLine SC 508
15
(2022) 4 SCC 463
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 63 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 34 court.

71. Sal Udyog11 is an example of a case in which the Supreme

Court found the interpretation, by the learned Arbitral Tribunal, of the
relevant clauses of the agreement to be unacceptable and “patently
illegal” by an incisive examination of the contractual clauses. Insofar
as the concept of “patent illegality”, as a ground to interfere with the
arbitral awards, under the amended Section 34 of the 1996 Act, is
concerned, paras 43 to 45 of the report in PSA Sical14 are relevant,
and may be reproduced thus:
“43. It will thus appear to be a more than settled legal
position, that in an application under Section 34, the court is
not expected to act as an appellate court and reappreciate the
evidence. The scope of interference would be limited to
grounds provided under Section 34 of the Arbitration Act.
The interference would be so warranted when the award is in
violation of “public policy of India”, which has been held to
mean “the fundamental policy of Indian law”. A judicial
intervention on account of interfering on the merits of the
award would not be permissible. However, the principles of
natural justice as contained in Section 18 and 34(2)(a)(iii) of
the Arbitration Act would continue to be the grounds of
challenge of an award. The ground for interference on the
basis that the award is in conflict with justice or morality is
now to be understood as a conflict with the “most basic
notions of morality or justice”. It is only such arbitral awards
that shock the conscience of the court, that can be set aside
on the said ground. An award would be set aside on the
ground of patent illegality appearing on the face of the award
and as such, which goes to the roots of the matter. However,
an illegality with regard to a mere erroneous application of
law would not be a ground for interference. Equally,
reappreciation of evidence would not be permissible on the
ground of patent illegality appearing on the face of the
award.

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 64 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 44. A decision which is perverse, though would not be a
ground for challenge under “public policy of India”, would
certainly amount to a patent illegality appearing on the face
of the award. However, a finding based on no evidence at all
or an award which ignores vital evidence in arriving at its
decision would be perverse and liable to be set aside on the
ground of patent illegality.

45. To understand the test of perversity, it will also be

appropriate to refer to paragraph 31 and 32 from the
judgment of this Court in Associate Builders5, which read
thus:

“31. The third juristic principle is that a decision

which is perverse or so irrational that no reasonable
person would have arrived at the same is important and
requires some degree of explanation. It is settled law
that where:

(i) a finding is based on no evidence, or

(ii) an Arbitral Tribunal takes into account

something irrelevant to the decision which it arrives at;
or

(iii) ignores vital evidence in arriving at its decision,

such decision would necessarily be perverse.

32. A good working test of perversity is contained

in two judgments. In Excise and Taxation Officer-
cum-Assessing Authority v. Gopi Nath & Sons 16, it
was held:

“7. … It is, no doubt, true that if a finding of fact is

arrived at by ignoring or excluding relevant material or
by taking into consideration irrelevant material or if the
finding so outrageously defies logic as to suffer from
the vice of irrationality incurring the blame of being
perverse, then, the finding is rendered infirm in law.”

In Kuldeep Singh v. Commr. of Police 17, it was held:

16
1992 Supp (2) SCC 312
17
(1999) 2 SCC 10
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 65 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 “10. A broad distinction has, therefore, to be
maintained between the decisions which are perverse
and those which are not. If a decision is arrived at on
no evidence or evidence which is thoroughly unreliable
and no reasonable person would act upon it, the order
would be perverse. But if there is some evidence on
record which is acceptable and which could be relied
upon, howsoever compendious it may be, the
conclusions would not be treated as perverse and the
findings would not be interfered with.”

72. IOCL15 examined, in depth, once again, Section 34 of the 1996

Act, having noted the law earlier enunciated in that regard. Paras 33,
42 to 46 and 53 of the report in that case read thus:
“33. The arbitral award is liable to be set aside insofar as
the same deals with disputes with regard to the lease
agreement which are not contemplated by the arbitration
clause in the dealership agreement and/or in other words, do
not fall within the terms of the submission to arbitration. The
arbitral award is thus liable to be set aside under Section
34(2)(a)(iv) of the 1996 Act. The decision enhancing the
lease rent is patently beyond the scope of the submission to
arbitration. Moreover, the composition of the Arbitral
Tribunal or the arbitral procedure was not in accordance with
the lease agreement dated 20-9-2005.

*****

42. In Associate Builders5, this Court held that an award

could be said to be against the public policy of India in, inter
alia, the following circumstances:

42.1. When an award is, on its face, in patent violation of a

statutory provision.

42.2. When the arbitrator/Arbitral Tribunal has failed to

adopt a judicial approach in deciding the dispute.

42.3. When an award is in violation of the principles of

Signature Not Verified
O.M.P. (COMM) 185/2021 Page 66 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 natural justice.

42.4. When an award is unreasonable or perverse.

42.5. When an award is patently illegal, which would

include an award in patent contravention of any substantive
law of India or in patent breach of the 1996 Act.

42.6. When an award is contrary to the interest of India, or

against justice or morality, in the sense that it shocks the
conscience of the Court.

43. An Arbitral Tribunal being a creature of contract, is

bound to act in terms of the contract under which it is
constituted. An award can be said to be patently illegal where
the Arbitral Tribunal has failed to act in terms of the contract
or has ignored the specific terms of a contract.

44. However, a distinction has to be drawn between failure

to act in terms of a contract and an erroneous interpretation
of the terms of a contract. An Arbitral Tribunal is entitled to
interpret the terms and conditions of a contract, while
adjudicating a dispute. An error in interpretation of a contract
in a case where there is valid and lawful submission of
arbitral disputes to an Arbitral Tribunal is an error within
jurisdiction.

45. The Court does not sit in appeal over the award made
by an Arbitral Tribunal. The Court does not ordinarily
interfere with interpretation made by the Arbitral Tribunal of
a contractual provision, unless such interpretation is patently
unreasonable or perverse. Where a contractual provision is
ambiguous or is capable of being interpreted in more ways
than one, the Court cannot interfere with the arbitral award,
only because the Court is of the opinion that another possible
interpretation would have been a better one.

*****

53. In Satyanarayana Construction Co. v. Union of

India 18, a Bench of this Court of coordinate strength held

18
(2011) 15 SCC 101
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 67 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 that once a rate had been fixed in a contract, it was not open
to the arbitrator to rewrite the terms of the contract and
award a higher rate. Where an arbitrator had in effect
rewritten the contract and awarded a rate, higher than that
agreed in the contract, the High Court was held not to
commit any error in setting aside the award.”

73. Rewriting of a contractual covenant has been held, in N.H.A.I.

v. Bumihiway DDB (JV) 19, to be against the law of the land, and fatal
to the award. The decisions in Union Territory of Pondicherry v.
P.V. Suresh20, Shree Ambica Medical Stores v. Surat People’s Co-
operative Bank Limited 21, IFFCO Tokio General Insurance Co. v
Pearl Beverages Ltd.22, Tata Consultancy Services v. Cyrus
Investments (P) Ltd.23 and Maharashtra State Electricity
Distribution Co. v. Maharashtra Electricity Regulatory
Commission24, also hold that clauses of a commercial contract cannot
be rewritten by a court or arbitral tribunal.

74. The present controversy has to be examined in the backdrop of

the afore-noted legal position.

Rival submissions before the learned Arbitral Tribunal, findings

of the learned Arbitral Tribunal, submissions before this Court
and findings, claim-wise

Re. Claim 2

19
(2006) 10 SCC 763
20
(1994) 2 SCC 70
21
(2020) 13 SCC 564
22
(2021) 7 SCC 704
23
(2021) 9 SCC 449
24
(2022) 4 SCC 657
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 68 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 75. By this claim, JTR sought extension of the Concession Period
on two grounds; firstly, on account of the Transporters’ strike which
took place between 13 and 23 April 2003 and, secondly, on account of
heavy rains in the area in the month of October 2003. JTR contended
that these events constituted “force majeure” within the meaning of
Clause 29.2 of the CA and entitled the plaintiff to extension of the
Concession Period.

76. JTR alleged that, owing to the transporters’ strike, supplies of

material were affected, thereby impeding the JTR in adhering to the
work schedule envisaged by the CA. The heavy rains which took
place in October 2003, too, similarly hindered effective and timely
execution of the project. These events, it was submitted, had resulted
in a material adverse effect on the project.

77. As these events amounted to “non-political force majeure”

events, within the meaning of clause 29.2(i) and (ii) of the CA, the
JTR claimed that it was entitled to extension of the Concession Period,
under Clause 29.6(b) of the CA, by the period during which the force
majeure subsisted.

78. By virtue of the definition contained in the CA, “financial

close” was stated to have been achieved by JTR on 23 June 2002. The
force majeure events, therefore, took place after financial close had
been achieved but before the Provisional Commercial Operation Date
(PCOD) of 10 February 2004 and the Commercial Operation Date

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 69 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 (COD) of 25 November 2004. JTR relied, for this purpose, on the
communications addressed by JTR to NHAI on 15 April 2003, 18
April 2003, 21 April 2003, 20 October 2003, 22 October 2003, 29
October 2003, 30 March 2004 and 28 March 2005. JTR further relied
on the following communications issued by NHAI to support its
claim:

(i) On 10 November 2003, the Project Director wrote to the

Chief General Manager (CGM), NHAI, specifically with
respect to the claims of JTR for extension of the Concession
Period under Clause 29.6 of the CA on account of the
transporters’ strike and the heavy rains which had lashed the
area. In respect of these two claims, the letter noted and
recommended thus:
“No. NHAI/PIU-CTA/N-T/JAS/03-04/2736
Date: 10-11-2003
The Chief General Manager (MC),
National Highways Authority of India
New Delhi

*****

Dear Sir,

I submit that the Concessionaire Agreement for

Nelamangala-Tumkur BOT Project was concluded between
NHAI and M/s Jas Toll Road Company on 26.6.2001.

In the Chapter-VI – “Force Majeure”, there is provision

under clause 29.6 for extension of Concession period by an
amount of period for which such force majeure event shall
subsist, when the force majeure event occurs before
“COD”, the date set forth in the Project completion
schedule. In the present case as the Finance close is over
and before the COD, the effect of force majeure or upon the
occurrence, shall be considered accordingly. Such events

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 70 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 as detailed below are for consideration under clause 29.6.

1. Transporters Strike:

There was transporters strike from

13.4.2003 to 23.04.2003 which had resulted
in suspension of supply of materials and
thereby the works were affected during the
period of strike. The Independent
Consultants have recommended for
extension of 20 days beyond the scheduled
completion date, duly recommending the
extension of concession period stating that
the strike period even though 10 days but
had the effect of another 10 days. This
transporters strike is being qualified as a
“non-political force majeure event under
clause 29.2 (iii) of the Concession
Agreement to the extent of strike period, i.e.
from 13.4.2003 to 23.4.2003. As this period,
being more than 7 days, is qualified as “non
political force majeure event under clause
29.2 (iii) of the Concession Agreement. The
effect of force majeure event beyond the
strike period may not be required to be
considered for extension of concession
period

2. Exceptionally heavy rains:

The Independent Consultants have

recommended this to qualify the extension
of time under clause 29.2 (i) of Concession
Agreement without any specific period.
They have further stated that there is
virtually no work at site due to heavy rain
for 8 days in the month of October 2003.
But the Concessionaire has requested for 30
days extension of time on account of
exceptionally heavy rains but these rains
were experienced during the monsoon
period only which would have been
reasonably anticipated and expected to
occur. The reasonableness of this event
cannot be quantified particularly such an
event during the monsoon is likely to occur
and thereby the extension of time on this
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 71 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 account of exceptionally heavy rains in the
month of October may not qualify as an
event defined under clause 29.2.

As the Independent Consultant has also not

recommended for any specific period of
extension of time under clause 29.2 (i) of the
Concession Agreement and further
requested for favourable consideration due
to the delayed execution of works during the
crucial period of October 2003 keeping the
targeted completion of Project by December
2003 in view, the extension of time can be
considered for the period of 8 days when the
heavy rainfall was observed.

I, therefore, requested to consider the above points of

observation for obtaining the approval of Competent
Authority with regard to extension of time of this
Concession Agreement. Copies of the letters submitted by
the Independent Consultant are enclosed herewith for ready
reference and further necessary action.

Thanking you,

Yours faithfully,

Project Director
NHAI, PIU, Chitradurga”

(ii) On 28 November 2003, the IE wrote to the Project

Director, NHAI, referring to JTR’s letters to NHAI seeking
extension of the Concession Period, under Clause 29.6 of the
CA, on account of the transporters’ strike and the exceptionally
heavy rains that had affected the area. The letter opined that
evidence, in respect of the claim of force majeure, owing to the
aforesaid two factors, was forthcoming in the letters addressed
by JTR as well as in the daily progress report furnished to the
Project Director, NHAI. It was further opined that the heavy

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 72 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 rains that had affected the area were not attributable to regular
monsoon but were because of a low pressure area in the Bay of
Bengal. The IE, therefore, recommended 20 days’ extension on
account of the transporters strike and 25 days on account of the
heavy rains, working out to total of 45 days’ extension in the
Concession Period.

(iii) The third letter cited by JTR, in this context, was

addressed by the General Manager to the Project Director,
NHAI on 29 March 2004, by way of response to the letter dated
10 November 2003 supra from the Project Director to the
CGM. This letter reads thus:
“ Date: 29/03/2004

“To

The Project Director,

Project Implementation Unit,
National Highways Authority of India,
Near JMIT, NH-4(Km. 201)
Chitradurga – 577 502
Karnataka

Sub: Four laning and strengthening from km. 29.5 to km.

62.0 (Neelamangala – Tumkur) Section of NH-4 in
the state of Karnataka – Extension of time Reg.

Ref: Your letter no. NHAI/PIU-CTA/N-T/JAS/03-

04/2736, dt. 10/11/2023

Sir,

This is with reference to your letter cited, wherein

you have forwarded the proposal for granting extension of
time for the work referred in the above subject. The
Competent Authority has decided that the Concessionaire
should not be levied any penalty for delay of 42 days in
completing the work. A copy of minutes of the meeting of
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 73 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 Variations Committee held on 10.03.2004 on the above
subject is enclosed for further action.

Thanking you
Yours Sincerely,

(B.K. Bansal)
General Manger (MC-III)”

It may be noted that the provision for levy of penalty for

delaying in completion of the work, with respect to which the
afore-extracted letter dated 29 March 2004 exempted JTR, was
contained in Clause 15.4 of the CA, reproduced supra. JTR
contended that the letters dated 10 November 2003 from the
Project Director to the CGM, 28 November 2003 of the IE
specifically vouchsafed the petitioner’s claim for extension of
the Concession Period on account of the transporters’ strike and
the rains, with the later communication dated 28 November
2003 specifically recommending extension of the Concession
Period by 45 days.

(iv) It was further contended that the grant of exemption, to

JTR, from the imposition of penalty under Clause 15.4 of the
CA also amounted to an admission of the fact that JTR had in
fact been prevented from carrying out its obligations under the
CA in a timely fashion owing to force majeure.

(v) Reliance was also placed, by JTR, in this context, on

Clause 14.5(d), which empowered the IE to determine any
extension to the Project Completion Schedule and to the
Concession Period. The period of extension of 45 days, as
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 74 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 recommended by the IE vide letter dated 10 October 2007, it
was submitted, had neither been denied nor disputed by NHAI.

Response of NHAI in SOD

79. With respect to Claim 2, NHAI, in the SOD filed before the
learned Arbitral Tribunal submitted, in the first instance, that the claim
was barred by time. It was submitted that the transporters’ strike had
taken place between 13 and 23 April 2003 and rains had affected the
area in October 2003. The cause of action had, therefore, arisen in
favour of JTR in 2003. Claim 2, as urged before the learned Arbitral
Tribunal, was, therefore, barred by time.

80. In this context, NHAI further contended that JTR had invoked
Clause 39.1 only in 2007, for resolving the dispute by settlement. On
the said attempt not fructifying, it was submitted that JTR ought to
have immediately invoked the arbitration clause. Instead, notice under
Section 21 of the 1996 Act was issued by JTR to NHAI only on 15
May 2017, after 10 years. Even for this reason, it was submitted that
Claim 2 was time barred.

81. On merits, NHAI contested the entitlement of JTR to any

extension of time on account of the transporters strike and the rains
which had affected the area, treating them as force majeure, under
Clause 29.6 of the CA. It was submitted that the reliance, on the letter
dated 29 March 2004 supra, whereby NHAI had decided not to levy
penalty on JTR under Clause 15.4 of the CA, could not be regarded, in
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 75 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 any manner of speaking, as an acknowledgement of the entitlement of
JTR to extension of the Concession Period. The two aspects had no
inter-relationship between each other. The decision not to levy penalty
did not result, ipso facto, in entitlement, of JTR, to extension in the
Concession Period.

82. Apropos the rains which had affected the area in October 2003,
NHAI contended that they could not qualify as force majeure, as
defined in Clause 29.2 of the CA. Clause 29.2(i) included, within the
ambit of the expression “force majeure”, only acts of God or events
beyond the control of the affected party which could not reasonably
have been expected to occur. As such, an event of force majeure had
necessarily to be unexpected. October being the monsoon period, it
was submitted that heavy rains in October could not be regarded as
unexpected so as to constitute force majeure within the meaning of
Clause 29.2(i) of the CA.

83. It was further pointed out, by NHAI, that JTR had achieved
financial close on 23 June 2002 and had also achieved COD on 10
February 2004, more than four months in advance of the Schedule
date of completion, which was 23 June 2004. As such, it was
submitted that achieving of COD was not affected either by the
transporters’ strike or by the heavy rains in October 2003. In fact,
pointed out NHAI, JTR had even started collecting toll and, thereby
earning revenue, four months prior to the SOD, so that it could not
even be contended that owing to the alleged force majeure in the form

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 76 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 of the transporters’ strike and the heavy rains that had affected the
area, JTR had suffered any losses.

JTR’s stand in rejoinder

84. JTR, in its rejoinder before the learned Arbitral Tribunal,

initially contested the submission that Claim 2 was barred by time,
stating that arbitration was invoked only when attempts at settlement
of the dispute with NHAI failed. In view of the fact that the IE and
the Project Director had specifically recommended the claim of JTR,
it was submitted that the contention that the claim was time barred
was devoid of merit.

85. On merits, JTR reiterated its contention that the events

constituting subject matter of Claim 2 i.e., the transporters’ strike and
the heavy rainfall which had occurred in October 2003, were
unforeseeable and unexpected. The submission of NHAI that, if force
majeure was found to exist, JTR would be entitled only to extension
of the project completion date, was also contested, stating that, as per
the CA, the concession period would be extended in case force
majeure existed. In fact, reiterated JTR, the IE had, in the present
case, recommended such an extension.

Findings of the learned Arbitral Tribunal

86. Apropos limitation, the learned Arbitral Tribunal adopted, for

all claims, the findings returned by it, in respect of Claim 1. In respect

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 77 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 of Claim 1, the learned Arbitral Tribunal held that the various
communications between JTR and NHAI revealed that, till the
issuance of the letter dated 10 April 2017 supra, NHAI was
considering the tenability of JTR’s claims and the possibility of a
settlement of the claims by amicable resolution under Clause 39.1 (b)
of the CA. Applying the law laid down by the Supreme Court in
Rashtriya Ispat Nigam Ltd. v. Prathyusha Resources and Infra Pvt.
Ltd25, the learned Arbitral Tribunal held that it was only when the
claims of JTR were finally rejected by NHAI on 10 April 2017, that a
final cause of action, to provoke JTR to initiate arbitration could be
said to have arisen. In view of the fact that the possibility of an
amicable resolution of the dispute was alive till 10 April 2017, the
learned Arbitral Tribunal held that it could not be said that the claims,
as raised before the learned Arbitral Tribunal, were time barred.

87. On merits, the learned Arbitral Tribunal initially held thus:

“Upon merits, it is an admitted position that Transporter’s Strike is
covered under the definition of a Force Majeure event under the
terms of the Concession Agreement. Even the IE and the NHAI
have clearly mentioned the said fact in Exhibit C-17 and Exhibit
C-15 respectively.”

88. Exhibits C-15 and C-16, it may be noted, are letters dated 28
November 2003 from the IE to the Project Director, NHAI and letter
dated 29 March 2004 from the GM, NHAI to the Project Director,
respectively.

25
(2016) 12 SCC 405
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 78 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 89. Further, it was noted that the IE had acknowledged, in his letter
dated 28 November 2003 supra that the rains in October were on
account of a low pressure area in the Bay of Bengal. It could not,
therefore, be said that the rains were expected. They, therefore,
constituted force majeure within the meaning of Clause 29.1 of the
CA.

90. The learned Arbitral Tribunal also found in the submission of

NHAI that, as JTR had achieved the PCOD four months prior to the
scheduled COD, the force majeure event, if any, had been overcome
by JTR. The learned Arbitral Tribunal held that this argument
overlooked the fact that Clause 29.6(b) of the CA envisaged extension
of the Concession Period, of the project completion schedule and
concession period, in he event of force majeure, and not the COD. It
was also noted that, to a query addressed by the learned Arbitral
Tribunal to NHAI as to whether it was possible to extend the
construction period without extending the Concession Period in the
event of force majeure, no response was forthcoming.

91. The learned Arbitral Tribunal also agreed with JTR’s

submission that the decision not to levy penalty, under Clause 15.4 of
the CA on JTR, as communicated vide letter dated 29 March 2004 of
NHAI, despite the delay of 42 days in completion of construction
work, impliedly admitted the fact that JTR was entitled to extension of
the project completion schedule. That said, the learned Arbitral
Tribunal found that the decision to waive penalty was actually
immaterial as there was, in fact, no delay on the part of the JTR.
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 79 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 92. The learned Arbitral Tribunal also found substance in the
reliance, by JTR, on Clause 14.5 (d) of the CA which, authorized the
IE to determine any extension of the project completion schedule, the
scheduled COD and the Concession Period and further stated that
NHAI shall extend such events in accordance with the
recommendation of the IE. As such, it was held that Clause 14.5 (d)
obligated the NHAI to accept the recommendation of the IE on this
issue. In the present case, the IE, vide letter dated 10 October 2007,
and the Project Director, vide letter dated 10 April 2017,
recommended extension of the Concession Period by 45 days under
Claim 2. These, too, it was held, amounted to admissions on the part
of NHAI to the entitlement of JTR to 45 days extension on account of
extension of Concession Period on account of the nationwide transport
strike and the rains forming subject matter of Claim 2.

93. Resultantly, the learned Arbitral Tribunal held, in response to

Claim 2 in para 89 of the award, thus:
“89. Having regards to the findings as aforesaid, the Arbitral
Tribunal holds that the Claimant is entitled to an extension of 45
days in the Concession Period as recommended by the Independent
Engineer as well as the Project Director of NHAI on account of
Force Majeure events.”

Grounds of challenge in the present petition – NHAI’s contentions

94. NHAI has sought to challenge the award of the learned Arbitral
Tribunal, with respect to Claim 2, by contending, at the outset, that
there was no provision, in the entire CA, which made
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 80 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 recommendations of the IE binding on NHAI. Any recommendation
of the IE, it was submitted, was required to be tested on evidence and
could not be regarded as admission of any particular fact. Mr. Mittal
submits, in this regard, that the reliance, by the learned Arbitral
Tribunal on Clause 14.5(d) of the CA was completely misplaced,
inasmuch as the requirement of NHAI extending the Project
Completion Schedule and the Concession Period in accordance with
the recommendations of the IE, as envisaged in the said sub- clause,
was in the context of Clause 14.5(a), whereunder NHAI could, by
written notice, require JTR to forthwith suspend the whole or any part
of the Construction Works, if NHAI felt that the work was being
carried on in a manner which was unsafe or threatened users of the
Project Highway. Where Clause 14.5(a) did not apply, therefore,
there was no scope to apply Clause 14.5(d) either. Clause 14.5(d) had
no application to the issue of force majeure. In fact, submits Mr.
Mittal, the IE was not NHAI’s agent, and the recommendations of the
IE could not, therefore, operate as admissions against NHAI. At the
highest, they were mere recommendations.

95. NHAI further contends that the learned Arbitral Tribunal

ignored the letter dated 10 November 2003, whereby NHAI had
expressly stated that heavy rains were expected in October 2003, as it
was the monsoon season and that, therefore, the rains could not be
regarded as force majeure.

96. That apart, it is submitted that the IE was not an expert on

weather, and his observation to the effect that heavy rains were normal
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 81 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 in the month of October were, therefore, merely his individual
opinion, unsupported by any material on record. As such, it was
submitted that the finding, of the learned Arbitral Tribunal, that heavy
rains in October were unexpected, was a finding based on no
evidence, which was liable to be set aside under Section 34 of the
1996 Act, in view of the law enunciated in para 41 of the judgment of
the Supreme Court in Ssangyong Engineering8.

97. Further, it was submitted that Clause 29.6(b) envisaged

extension of the Concession Period by the period for which the force
majeure events subsisted. The onus to prove that rains in October
subsisted for 30 days, i.e. for the entire month of October 2003, was,
therefore, on JTR. JTR had not placed any material on record to that
effect, to establish that work remained suspended for the entire month
of October 2003 owing to heavy rains.

98. Reliance is also placed by NHAI on the record of cross

examination of Pankaj Kumar Jaiswal (CW-1), who, in response to
Question 62 put to him, acknowledged that the 24 months period of
construction included the rainy season, even while asserting that the
claim for extension of time on the ground of force majeure was in
accordance with the terms of CA.

99. In as much as ignoring of vital evidence constitutes

contravention of public policy, as held in paras 31 to 33 of Associate
Builders5 and para 31 of Ssangyong Engineering8, NHAI contends

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 82 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 that the findings of the learned Arbitral Tribunal qua Claim 2 cannot
sustain.

100. NHAI further submits that the decision of the learned Arbitral
Tribunal is in violation of Clauses 29.1 (ii) and (iii) which envisaged
an event falling under the category of force majeure only if the party,
claiming to be affected by the event, was unable to overcome it, or the
event had a material adverse effect on the project. NHAI submits that,
in the present case, as JTR achieved PCOD on 10 February 2004, four
months in advance of the schedule date, which was 21 June 2004, it
could not be said that the transporters’ strike or the October rains had
any material adverse effect, or had hindered the JTR in proceeding
with the project within the meaning of Clauses 29.1 (ii) or (iii) of the
CA. In ignoring Clauses 29.1(ii) and (iii), NHAI contends that the
impugned award contravenes Section 28(3) of the 1996 Act. This, too,
was, therefore, a finding based on no evidence within the meaning of
para 41 of Ssangyong Engineering8.

101. NHAI further contends that the interpretation, by the learned

Arbitral Tribunal, on the letter dated 29 March 2004, whereby it was
decided not to levy penalty on JTR under Clause 15.4 of the CA, was
perverse. It is submitted by NHAI that the said letter could not be
regarded as any admission, on its part, regarding the entitlement of
JTR to extension of the Concession Period. Clause 14.5 (d) of the CA,
too, it is submitted, was inapplicable to the present issue, as it related
to Clause 14.5 (a), which provided for suspension of work, where the
work was being carried out in a manner which threatened the safety of
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 83 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 work or the users of the project highway. Clause 14.5(d), therefore,
had no applicability on the aspect of force majeure.

102. Similarly, it is submitted that the learned Arbitral Tribunal

could not have blindly relied on the letter dated 10 April 2017 supra,
whereby the Project Director had recommended extension of the
Concession Period as claimed in Claim 2, as the view expressed by
the Project Director, according to NHAI, was not one which any
reasonable person would have arrived at.

103. Mr. Mittal further submits that Claim 2 was in fact barred by
time, and that the learned Arbitral Tribunal erred in law in holding
otherwise. The only ground on which the learned Arbitral Tribunal
held the claims to be within time was that the claims had never been
rejected by NHAI which, therefore, had “kept the same open and
under consideration from time to time”. Communications from NHAI
were relied upon, in that regard. In view of the said communications,
the learned Arbitral Tribunal expressed the view that negotiations and
a dialogue were ongoing between JTR and NHAI till the issuance of
Ex. C-89. The cause of action, therefore, continued to subsist till the
issuance of the said communication. The learned Arbitral Tribunal
further held that JTR could not be expected to initiate arbitration so
long as the possibility of an amicable resolution of the disputes remain
alive. That possibility was extinguished only on 10 April 2017, vide
Ex. C-89.

104. In the context of the aspect of limitation, Mr. Mittal has placed
reliance on the judgment of the Supreme Court in Geo Miller & Co.
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 84 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 Pvt Ltd v. Rajasthan Vidyut Utpadan Nigam Ltd 26, specifically
emphasising paras 3, 4, 28 and 29 of the said decision. Mr. Mittal
points out that JTR was advised to go in for dispute resolution vide the
Minutes of Meeting dated 24 February 2010, as had been admitted by
JTR itself. Reckoned thus, he submits that Claim 2 was clearly barred
by time. He also relies on paras 40 and 41 of the decision in B.S.N.L.
v. Norton Networks Pvt Ltd 27. He further submits that the ground on
which the learned Arbitral Tribunal had sought to distinguish the
judgment of the Supreme Court in State of Gujarat v. Kothari
Associates28, which had been cited by NHAI, was contrary to paras 11
and 12 of the said decision. The learned Arbitral Tribunal had
distinguished the said decision by observing that, in that case, the
claims of the claimant were repudiated by the opposite party whereas,
in the present case, there had never been any unequivocal denial, by
NHAI, of JTR’s claims. This, submits Mr. Mittal, is not the correct
legal position. Denial by NHAI is not mandatory for a course of
action to have arisen for JTR to institute arbitral proceedings. That
apart, even if one were to reckon limitation from the date of denial, by
NHAI, of the said claims, the claims continued to have been instituted
more than three years from the said date.

Submissions of JTR before this Court

105. Mr. Rajshekhar Rao, appearing for JTR, essentially reiterated

the reasoning of the learned Arbitral Tribunal in allowing Claim 2 and

26
(2020) 14 SCC 643
27
2021 SCC OnLine SC 207
28
(2016) 14 SCC 761
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 85 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 submitted that no occasion for interference by this Court, with the said
decision, could be said to exist.

Findings

106. Having examined the record, I find no reason to interfere with

the decision of the learned Arbitral Tribunal with respect to Claim 2 of
JTR, especially given the limited parameters within which Section 34
operates.

107. Apropos limitation, the learned Arbitral Tribunal has held that,
attempts at an amicable resolution of the dispute being a contractual
prerequisite before instituting arbitral proceedings, JTR could not be
faulted in not instituting the said proceedings till 10 April 2017, when
NHAI made it finally clear that an amicable resolution of the dispute
was not possible. Notice under Section 21 of the 1996 Act was issued
by JTR practically within a month thereof, on 15 May 2017. If,
therefore, the learned Arbitral Tribunal did not deem it appropriate to
reject JTR’s claims on the ground of limitation, I do not find any
reason to interfere with the decision, under Section 34 of the 1996
Act.

108. On merits, too, the question of whether heavy rains in October

were expected, or unexpected, is a pure question of fact. The IE had,
in its letter dated 28 November 2003, acknowledged that the rains
were on account of low-pressure area in the Bay of Bengal and could

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 86 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 not, therefore, be regarded as usual or expected. The learned Arbitral
Tribunal justifiably followed the recommendation of the IE.

109. The submission of NHAI that, as JTR had achieved the PCOD
four months prior to the scheduled COD, the progress of the project
could not be said to have been affected by force majeure, also fails to
impress. The mere fact that the project might have been completed in
time does not necessarily imply, ipso facto, that there was no
deleterious effect of the force majeure events, in the form of the
transporters strike and the unseasonal rains. Though there is
substance in NHAI’s contention that the reliance, by the learned
Arbitral Tribunal, on Clause 14.5(d), to hold that the IE’s
recommendations had to be necessarily accepted by NHAI, was
misguided, nonetheless, on facts, the finding of the existence of force
majeure, and of the force majeure having adversely impacted the
progress of the project, do not call for interference under Section 34 of
the 1996 Act.

110. NHAI has not independently chosen to challenge the decision

of the learned Arbitral Tribunal with respect to Claim 2 on the aspect
of the number of days of extension of the Concession Period to which
JTR would be entitled.

111. In that view of the matter, this Court upholds the impugned
Arbitral Award, insofar as it decides Claim 2.

Re. Claim 4

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 87 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 Statement of Claim

112. The circumstances in which JTR raised Claim 4 before the

learned Arbitral Tribunal, in the SOC, may be enumerated as under:

(i) After the COD, JTR commenced collection of Toll Fee

from vehicles as per the Notification dated 24 December 2003
under Schedule G read with Clause 4(k) of the CA.

(ii) Collection of fee at the said rates was, however,

obstructed by local vehicle owners, resulting in JTR having to
allow the local vehicle owners, LPT as well as LCT, to use the
Project Highway without paying Toll Fee as per the aforesaid
Notification, for 881 days.

(iii) Ultimately, on 10 July 2006, a Supplementary CA was

executed between JTR and NHAI, in which Clause 6.3 and
Schedule G of the CA was amended to read thus:

Clause 6.3

“The Concessionaire shall not collect any Fee in excess of

50% of the actual Fee from the local commercial traffic.”

In Schedule G

I. The Concessionaire shall not collect any fees from

Local Personal Traffic and Local Commercial Traffic in
excess of the following discounted rates, namely:

(a) Local Personal Traffic: Twenty five percent

of the applicable fee for the specific category of
vehicle.

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 88 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 (b) Local Commercial Traffic: Fifty percent of
the applicable fees for the specific category of
vehicle.”

(iv) The CA dated 28 June 2001, in Clause 6.3, envisaged

collection, from all categories of vehicles, i.e. LPT as well as
LCT, of 50% of the applicable fees while crossing the Toll
Plaza. The Supplementary CA dated 10 July 2006 granted
concession, vis-à-vis the Toll Fees payable as per the CA, only
to LPT, by requiring LPT vehicles to pay only 25% of the
applicable fees, while retaining 50% of the applicable fees as
chargeable from LCT vehicles. As such, JTR commenced
judging concessional fee of 25% only from LPT, even while
continuing to charge 50% from LCT.

(v) On 30 June 2009, the NHAI notified the following

revised toll fees, chargeable w.e.f. 1 July 2009, as approved by
the Competent Authority:

Category of vehicles CAR LGV Truck/Bus

Fee for the whole stretch 23 40 80
Fee for the traffic crossing only one fee plaza 12 20 40
Fee for the local personal traffic 3 5 10
Fee for the local commercial traffic 6 10 20

Thus, unlike what was envisaged in the Supplementary CA, the

Notification dated 30 June 2009 provided concessional rate of
toll fee not only to LPT, but also to LCT, with LPT having to

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 89 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 pay only 12.5% of the normal fee chargeable for the whole
stretch and LCT having to pay 25% of the normal fee.

(vi) On 1 July 2009, JTR wrote to the NHAI, submitting,

inter alia, that the toll rates notified by the notification dated 30
June 2009 were contrary to the CA as well as the
recommendations of the IE. It was pointed out that the newly
notified toll rates envisaged concessional fees even for LCT,
which was not even envisaged in the Supplementary CA.
Inasmuch as the CA, and the Supplementary CA, bound the
parties, JTR submitted that the newly notified toll rates were
contrary both to the CA and Supplementary CA. It was further
submitted that NHAI was liable to reimburse JTR for the
financial cash loss which it would suffer owing to the lessor toll
rate chargeable by it.

(vii) On 9 July 2009, JTR again wrote to NHAI,

acknowledging the fact that, in the Supplementary CA dated 10
July 2006, concessional toll fee, vis-à-vis the original CA dated
28 June 2001, had been extended only to LPT. The
communication also quantified the losses suffered by JTR, on
the basis of concession extended to LCT.

(viii) JTR referred the aforesaid issue to EMA Unihorn (India)

Pvt Ltd (“EMA”, hereinafter), a newly appointed Independent
Engineer of NHAI, to verify and quantify the loss suffered by it
owing to the concession extended to LPT. EMA addressed the

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 90 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 following communication, dated 29 September 2009, to the
Project Director, NHAI:

“Sir,

The Concessionaire M/s Jas Toll Road Co. Ltd have

submitted the list of LPT registered with them and
requested us to verify and quantify the loss thereon.

The list showing the details of all the vehicles, have been
verified by us and based on this data, we are enclosing
herewith the details as Annexure-I.

From the annexure it can be seen that 1105 no. of LPT

vehicle are using the toll road after making discounted
payments and 953 nos. of vehicles are using the toll road
without making any payment. The Concessionaire is
unable to produce data of yesteryears. Hence the recent
records that indicate movement vehicles registered as LPT
to be about 60% has been adopted for quantifying daily
average losses.

Based on this about 663 vehicles are moving regularly.

Hence there is a loss of revenue of Rs. 11,934 (663 x 2 x
@Rs. 9/–) per day due to registered LPT vehicles.

Apart from this about 572 (i.e. 60% of 953) vehicles are
using this concession without paying the discount fee
though registered with the concessionaire as LPT. Loss of
revenue on account of this is about Rs. 10,296/– (i.e.
572x2x@Rs.9/–). The admissibility of revenue loss due to
LPT not pay may be decided at your end.

The same is submitted for your decision in the matter.”

Annexure I to the aforesaid communication dated 29 September

2009 of EMA contained tabular statements of LPT vehicles
which were, and which were not, paying toll fee, at both the
Toll Plazas, as well as the cumulative figure in that regard. The
cumulative figure was thus tabulated in Annexure I:

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 91 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 Toll Plaza 1 & 2
Sl No Description With Proof Without Total
of Reg. of Proof of
Vehicles Reg. of
Vehicles
1 NON PAYING LPT 298 655 953
2 PAYING LPT 802 303 1105

(ix) The Project Director forwarded the said report of EMA to

the Chief General Manager (Tech), NHAI, noting that EMA
had, on the basis of the records of JTR, assessed tentative losses
of approximately₹ 22,000/ – per day, which had been
forwarded to NHAI for payment of compensation as per the CA
and the Supplementary CA, in respect of non-paying LPT.

(x) JTR, thereafter, wrote, on 21 June 2017, to the Project

Director, NHAI as well as to the IE, stating that it had worked
out the revenue losses suffered by it, from the year 2007-2008
till May 2017, in accordance with the Supplementary CA due to
the concession granted to LPT as well as LCT beyond the
purview of the CA. On the basis of the said calculation, JTR
claimed 3 years extension of time of the Concession Period.

113. As NHAI did not make payment as per the claim of JTR, this
claim was agitated before the learned Arbitral Tribunal as Claim 4.
Paras 109 and 110 of the SOC, accordingly, averred and prayed thus:

“109. For the reasons stated hereinabove, the Respondent are

liable to pay the compensation for revenue losses of 881 days as
the Local Traffic did not pay the User’s Fee and extension of the

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 92 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 concession period as per the Supplementary Agreement executed
between the parties.

110. Therefore, the Hon’ble Arbitral Tribunal may be pleased to

make and publish an Award for extension 3 years of the
Concession Period considering the compounding effect in favour
of the Claimant and against the Respondent for the revenue losses
suffered by the Claimant due to concession in Users Fee for Local
Personal and Commercial Traffic.”

Response of NHAI in SOD

114. NHAI had, as in the case of Claim 2, advanced, as its first

objection to Claim 4 of JTR, the plea of limitation. It was contended
that the cause of action, for instituting the said claim, was the alleged
non-payment, to JTR, in terms of the CA and the Supplementary CA,
for the concession extended to LPT and LCT from the commencement
of the PCOD, i.e. 10 February 2004, till the signing of the
Supplementary CA on 10 July 2006. The claim, however, was
instituted in 2017 and was, therefore, miserably time-barred. It was
further contended that, having invoked Clause 39.1 of the CA as early
as in 2007, and when the claim of JTR did not resolve within 30 days
of the notice issued by it, JTR ought to have invoked Clause 39.2,
envisaging arbitration, immediately. Instead, Clause 39.2 was
invoked nearly 10 years thereafter, in 2017.

115. On merits, NHAI contended that, on 5 May 2006, a meeting had

been convened in which it was categorically conveyed, to JTR, that
JTR would not be entitled to any compensation whatsoever with
respect to the period prior to the Supplementary CA dated 10 July

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 93 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 2006. No demand, for the said period, had been raised by JTR either.
As such, it was contended that it was not open to JTR, at the belated
stage of submission of the SOC, to raise a demand for the period prior
to 10 July 2006. At this juncture, it would be advantageous to
reproduce the relevant portion of the Minutes of the Meeting dated 5
May 2006:
“Minutes of the meeting held on 05.05.2006 under the
chairmanship of CGM (MC) to resolve issues related to
Implementation of concessions to local users in respect of
Neelamangala-Tumkur section (km 29.5 km 62.0) of NH-4 in
the state of Karnataka on BOT basis

List of Participants is as per Annexure ‘I’

Sh. S.C. Jindal, CGM (CM) could not attend the meeting due to
his other pre-occupation.

Giving background of the case, Project Director informed that in

this project, there was no provision for concession to the local
users which led to protests by them. On the request of the State
Government, the matter was taken up with the Ministry in June
2004. After a couple of review meetings, Ministry in June, 2005
agreed to allow concession to the local personal traffic and
compensate the Concessionaire by way of extension of the
concession period. It was decided and conveyed to PD,
Chitradurga in December 2005 that are Supplementary
Agreement be signed with the Concessionaire and assessment of
the losses be made in accordance with the decision of the
Ministry conveyed in June, 2005. Accordingly, a Supplementary
Agreement along with modified revised Schedule ‘G’ was
submitted by PD. CO Division suggested certain modifications
as per Annexure-‘II’. Some of the modifications suggested by
CO Division were not agreed to by the Concessionaire and
therefore a meeting was called in NHAI Headquarter to resolve
the matter.

The difference of opinion between NHAI and that the

Concessionaire was discussed in detail. After deliberations, the
following was agreed that

*****

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 94 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 2. Effective date for calculating losses to the
Concessionaire and compensation thereof

It was decided that the Concessionaire would be eligible for

compensation from the current date i.e. signing of supplementary
agreement and notification thereof. No compensation to
Concessionaire can be made from retrospective date.

The representative of Concessionaire expressed reservations on

the above proposal and requested for compensation from the date
of Commercial Operation Date (COD). CGM (MC) clarified that
no compensation can be allowed with a retrospective effect and
would be permissible only from the date of actual implementation
of the decision of the Ministry. If the Concessionaire did not
consider this in conformity with the agreement, he is free to take
recourse to the dispute resolution mechanism available in the
contract agreement.”
(Emphasis supplied)

NHAI has categorically denied JTR’s assertion that it had ever been
assured of any compensation for losses suffered prior to 10 July 2006.
No such provision, it is pointed out, was contained even in the
Supplementary CA. NHAI has further pointed out that there is no
correspondence or other document on record to vouchsafe its assertion
that local highway users were not willing to pay toll at the notified
rates or that they create any agitation or ruckus. Collection of Toll
from highway users, it was submitted, was the exclusive responsibility
of JTR. The attempt of JTR to conflate the alleged losses suffered by
it prior to the Supplementary CA dated 10 July 2006, and thereafter, it
was submitted, was intended to mislead the learned Arbitral Tribunal.

116. NHAI also categorically refuted the assertion of JTR that it was
entitled to any compensation towards losses suffered on account of
charging of concessional toll free from LCTs. The letter dated 9 July
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 95 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 2009 from JTR to NHAI itself admitted that the Supplementary CA
provided for charging of concessional toll fee only from LPT, and not
from LCT. This was also clarified in the letter dated 15 May 2013
from the IE to the Project Director, NHAI, which read thus:
“Dear Sir,

Sub: Four laning of Neelamangala-Tumkur Highway from km 29.5

km to 62.00 on BOT basis – Proposal for User Fee Revision,
regarding

Ref: JAS/NGP/UNIHORN/TUMKUR/23 dated 10.5.2013

Please find enclosed a copy of the letter from M/s Jas Toll Road
Company Limited dated 10th May ‘2013, regarding the proposal
for User Fee Revision as per Concession Agreement. The revised
User Fee calculation as worked out by this office is attached as
Annexure-I. The Calculation attached in annexure-I is based on
the Provisional WPI for the month of March 2013 published in the
website http;//eaindustry.nic.in as on 14.05.2013. The WPI for
March’2013, once finalised and published in the website, the same
shall be processed for approval by the Competent Authority as it
has to be published in local papers 10 days in advance before
implementation of revision of fee by 1st July’2013.

Further, regarding concession to Local Personal Traffic, we are

following the directions of NHAI communicated vide letter no.
NHAI/RO-BNG/13027/4/2010/2166 dated 03.11.2011 received
from DGM (Tech), RO, Bangalore.

Regarding Local Commercial Traffic, it is to state that the

concession to Local commercial Traffic is not being implemented
by the Concessionaire as there is no direction in the
Supplementary Concession Agreement for compensation for loss of
revenue to Commercial Traffic. Hence, the Concession to Local
Commercial Traffic yis not being implemented by the
Concessionaire till date and no compensation is payable by NHAI
on this account. In view of the above, we are not recommending
the concessional rate to the Local Commercial Traffic.

Thanking you,

Yours faithfully,
(S. Harimurugan)
Team Leader
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 96 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 Tumkur Project”

(Emphasis supplied)

117. Apropos loss suffered on account of charging of concessional

toll fee from LPT, NHAI placed, on record, a report of the IE which
worked out the number of days of extension to which JTR was
entitled against losses suffered on account of charging of concessional
toll fee from LPT for the period April 2007 to January 2010 as 1.36
days for 2007-2008, 2.86 days for 2008-2009 and 3.55 days for 2009-
2010.

118. Even in respect of LPT, it was contended by NHAI that JTR

had not followed the procedure envisaged in the Supplementary CA,
which required JTR to register the LPT vehicles which, alone, would
be entitled for concession. JTR, it was submitted, was awarding
concession to vehicles indiscriminately, without registering them
under LPT category.

119. It was further submitted that a perusal of Schedule M, filed by

JTR, disclosed that there was no classification of vehicles as LCT in
the said Schedule. This indicated that the claim for extension of the
Concession Period on account of charging of concessional toll free
from LCT, as raised by JTR, was an afterthought. The
correspondence between JTR and NHAI, too, never raised any claim
for extension of the Concession Period on account of charging of
concessional toll fee from LCT.

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 97 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 Rejoinder submissions by JTR

120. JTR, in rejoinder, first sought to refute the plea of limitation

advanced by NHAI. It is contended that the claim of JTR was
accepted by the IE vide letter dated 10 October 2007, which was never
disputed by NHAI. There being no dispute on the entitlement to
extension of the Concession Period as claimed by JTR, therefore, no
occasion arose to refer the dispute is to arbitration. In fact, contends
JTR, NHAI continuously assured JTR that it would compensate JTR
as per the recommendations of the IE. JTR was constrained to invoke
arbitration only when NHAI failed to abide by its assurances. The
claim could not, therefore, be treated as barred by time.

121. On merits, JTR’s rejoinder commences with the following

starkly contradictory assertions, in para 43:

43. “That the contents of Para No. 43 are wrong and denied. It is
denied that the Claimant has claimed any compensation prior to
the date of entering into the supplementary agreement. The
minutes of the meeting dated 05.05.2006 placed at Exhibit R-3
clearly indicate that it was open for the Claimant to claim for the
losses incurred prior to the supplementary agreement.”

(Emphasis supplied)

JTR sought to draw reference to communications dated 25 March

2004, 29 June 2004 and 11 July 2006, between JTR and NHAI which,
submitted JTR, indicated that the issue of compensating JTR for the
losses suffered on account of non-payment of toll fee by LCT and
LPT vehicles till the execution of the Supplementary CA, was under

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 98 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 consideration with NHAI. Of these three letters, the letter dated 25
March 2004 merely sought to inform NHAI of the alleged agitations
and strike on the Project Highway by owners of Private Commercial
buses, and sought help in obtaining Police assistance to deal with the
issue. No claim for any compensation or extension of Concession
Period finds place in the said letter. The letter dated 29 June 2004,
however, merits reproduction, especially as JTR placed reliance on
the said communication both before the learned Arbitral tribunal as
well as before this Court:
“ June 29, 2004
Dear
Shri Singh,

Kindly recall that the Authority in its meeting held on the 19th
June 2004 discussed the issue of granting concession to the local
and frequent users of the Neelamangala-Tumkur BOT project and
modification in the terms of agreement.
The Authority felt it was necessary to

(i) Bring the provisions relating to concessions to local users

contained in the concession agreement of Neelamangala-
Tumkur BOT Project on par with the model concession
agreement and

(ii) bring in uniformity in respect of various concessions

granted to users of the roads in all types of road projects
(BOT, public funded etc.)

and decided to recommend the proposal to Ministry of Road

Transport and Highways for approval.

Accordingly, a note has been prepared and is enclosed

herewith for consideration in order to bring the provisions on
Neelamangala-Tumkur project at part with the model concession
agreement. It is proposed that the local personal traffic using the
project be charged a fee of₹ 4/ - per vehicle if it crosses only one
toll plaza instead of ₹ 9/ - provided for in the agreement. For local
commercial traffic, the provision is already at part with the Model
Concession Agreement and hence no change is proposed. The
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 99 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 concession agreement will have to be modified by mutual consent
of NHAI and the concessionaire who may have to be compensated
for the loss of revenue by extending the concession period. It is
proposed, therefore, that a committee in NHAI having a
representative from MORT& H may recommend the extension of
concession period after actual observation of revenue generated
‘before’ and ‘after’ this relief to local traffic is granted.

As regard the larger issue of having a uniform policy in

respect of concessions i.e., user and frequent users applicable to
both public funded and BOT project, it is suggested that a High
Powered Committee may be set up under your Chairmanship,
which should have representation from MORT& H, Ministry of
Finance Ministry of Law and NHAI.

I shall be grateful for an early action in the matter, particularly, in

the case of Neelamangala-Tumkur, where the problem calls for
urgent solution.

Yours sincerely,

Sd/-
(Santosh Nautiyal)”

The third letter, dated 11 July 2006, cited by JTR merely intimated
NHAI that JTR had signed the Supplementary CA without prejudice
to its right to claim compensation for the losses suffered on account of
charging of concessional toll fee from LCT and LPT from the COD,
rather than prospectively from the date of the Supplementary CA, in
accordance with the procedure envisaged, in that regard, in the CA.

122. Apropos the recommendation of the IE, JTR submitted that

though, initially, the IE assessed the losses only in terms of LPT,
subsequently, after a legal opinion was obtained, fresh
recommendation was given vide letters dated 11 August 2011 and 26
August 2011. The fact that JTR had suffered losses, it was submitted,

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 100 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 was admitted by NHAI. The inability to collect toll for the period of
881 days till the execution of the Supplementary CA on 10 July 2006,
it was submitted, constituted an indirect force majeure event and
entitled JTR, as per the contract, to extension of the Concession
Period.

Findings of the learned Arbitral Tribunal.

123. Apropos Claim 4, the learned Arbitral Tribunal identified three

questions which arose for consideration, thus:
“1. Whether the claimant is entitled to be compensated from
the date of signing of the Supplementary Agreement and the
notification thereon, or from the PCOD?

2. Whether the claimant is entitled to be compensated for

concession period to local commercial traffic?

3. If the claimant is to be granted relief under the present

claim, then what methodology is to be adopted for calculating the
compensation or extension of the concession period?”

124. The learned Arbitral Tribunal proceeded to address these three

questions, as framed by it, thus:

Re: Question 1:

125. The learned Arbitral Tribunal commenced its discussion, with

respect to Question 1, observing that the following facts were
admitted; firstly, that, as per the Concession Agreement dated 28 June
2001, the JTR was required to charge and collect toll fee for every trip
as given in Schedule G for local traffic as well as other traffic passing
through the toll plazas, secondly, that no concession/discounted toll
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 101 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 fee was provided for any category of local traffic, i.e. LPT or LCT,
who had resided in the vicinity of the project highway, and who had to
cross only one toll plaza, albeit on multiple occasions in a day, thirdly,
that such users resorted to agitation, as a result of which JTR and
NHAI were made to charge concessional rates from the people
residing in the vicinity of the project highway, fourthly, that, as a
consequence, NHAI and JTR entered into the supplementary CA
dated 10 July 2006 , fifthly, that, under the Supplementary CA, JTR
was made to charge a concessional/discounted rate from the local
traffic, though it was a matter of dispute as to whether the concession
was available only to LCT to LPT or extended to both LPT and LCT.

126. The Supplementary CA came to be executed nearly two and a

half years after the PCOD. The supplementary CA was silent on the
aspect of compensation to JTR for the period between the PCOD and
the execution of the supplementary CA. Reliance was placed, by the
learned Arbitral Tribunal, on the minutes of the meeting dated 24
February 2010 29, which required the NHAI to decide on the
entitlement of JTR to compensation for losses suffered between the
PCOD and the date of execution of the supplementary CA. The
NHAI having failed to take a decision in that regard, the learned
Arbitral Tribunal held that the claimant was entitled to be
compensated for the said period.

Re: Question 2

29
Refer para 31 supra
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 102 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 127. Question 2 involved the issue of whether the reduced
concession fee was chargeable only from LPT or from LPT as well as
LCT vehicles. NHAI relied on Clause 2.3 of the supplementary CA
which started with the following sentence:
“The Concessionaire shall charge User Fee at the
concessional rate referred to in Clause herein above from the
Local Personal Traffic”

As such, NHAI contended that concession having been extended only

to LPT, any loss suffered by JTR owing to the toll rates charged from
LCT vehicles could not be compensated under the CA or under the
supplementary CA.

128. The learned Arbitral Tribunal has also rejected this submission
on the basis of a clarification, provided by the learned Counsel for the
NHAI during the course of hearing, as to the meaning of the
expression “applicable fee”, as contained in Clause 2.1 of the
supplementary CA. The learned Arbitral Tribunal notes that, in
Clause 6 of Schedule G of the CA, all vehicles, who passed through
only one of the toll plazas were required to pay 50% of the specified
fee. Clause 1 of the supplementary CA supra defined LCT and LPT as
commercial vehicles and personal vehicles which did not cross more
than one of the toll plazas. Clause 2.1 of the supplementary CA reads
thus:
2. Terms of Agreement:

The Parties hereto hereby agree that

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 103 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 2.1 The Concessionaire shall not collect any fees from Local
Personal Traffic and Local Commercial Traffic in excess of the
following discounted rates, namely:

(a) Local Personal Traffic: Twenty five percent of the

applicable fee for the specific category of vehicle.

(b) Local Commercial Traffic: Fifty percent of the

applicable fees for the specific category of vehicle.

To a query from the learned Arbitral Tribunal, the learned Counsel for
the NHAI clarified that the expression “applicable fee”, as employed
in Clause 2.1 (a) and (b) was in reference to the fee applicable to
vehicles crossing only one toll plaza. Thus, in effect, LPT vehicles
were, under the supplementary CA, required to pay only 25% of the
fee already chargeable with respect to LPT vehicles crossing only one
toll plaza and LCT vehicles were required to pay 50% of the fees
already chargeable with respect to vehicles who crossed only one toll
plaza. Thus, the discount/concession granted under Clause 2.1 of the
supplementary CA resulted in a further 50% discount over and above
the discounted fee chargeable under the CA. The learned Arbitral
Tribunal found this interpretation to be supported by the fee
notification dated 30 June 2009 supra. In this view of the matter, the
learned Arbitral Tribunal accepted the contention of JTR that the
reference to “local personal traffic” (without reference to “local
commercial traffic”) in the opening sentence of Clause 2.3 of the
supplementary CA was a mere typographical error. Inasmuch as the
JTR was effectively charging 50% of the fee chargeable from LCTs
who crossed only one toll plaza under the CA by virtue of Clause 2.1
in the supplementary CA, the learned Arbitral Tribunal found that

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 104 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 JTR would be entitled to compensation in that regard.

Re: Question 3

129. Question 3 pertained to the methodology to be followed while

calculating the benefit to be granted to the JTR for the losses suffered
by it either by way of compensation or by way of extension in the
Concession Period. This question is of pivotal importance so far as
the present controversy is concerned.

130. The learned Arbitral Tribunal first observed that NHAI had
defaulted in the obligation cast on it by Clause 2.3 of the
supplementary CA, to set up a committee to review the revenue losses
incurred by JTR on account of concession granted to local traffic.
Thus, NHAI had committed clear breach of the supplementary CA,
for which no explanation was forthcoming.

131. It was also observed that though NHAI had strongly objected to
the calculation proposed by JTR, no alternative calculation or
methodology was proposed by NHAI to quantify the loss suffered by
JTR. The learned Arbitral Tribunal noted that NHAI did not dispute
the fact that JTR had indeed suffered losses.

132. Thereafter, the learned Arbitral Tribunal observed the

calculations submitted by JTR along with its letter dated 21 June
2017, under which JTR had worked out the number of days of
extension of the concession period to which it was entitled, against the
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 105 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 losses suffered during the period 2007-08 to 2016-17, as 421.8 days.
The learned Arbitral Tribunal, in para 177 (dd), of the impugned
award, found the said calculations not to be acceptable.

133. Thereafter, the learned Arbitral Tribunal, in the impugned

award, holds the methodology adopted by the IE, in its report dated 5
March 2010, though it was not acted upon, to be in order. As such,
JTR was directed to work out the number of days of extension of the
concession period to which it was entitled, for the losses suffered by it
till 2019.

134. The learned Arbitral Tribunal also found the report dated 16
August 2019 of the IE, regarding the revenue loss suffered by JTR, at
the two toll plazas in the month of June 2019, to be acceptable.

135. The learned Arbitral Tribunal finds that JTR had, on the basis
of the manner in which the IE had calculated the losses suffered by
JTR during the month of June 2019, worked out the extension in the
concession period, to which it would be entitled, for the entire period
1 July 2004 till June 2020. The manner in which this was done by the
JTR has been thus noted by the by the learned Arbitral Tribunal in the
impugned award (omitting the tabulated figures):

“ii. With regard to the last objection of the Respondent

pertaining to the assumption that each registered vehicles is
undertaking at least 2 trips across a particular toll plaza with
which it is registered, the AT finds some force in this
argument. It is possible that such vehicles are not undertaking
any trips across the Toll Plaza in question on a particular day
or undertaking more than 2 such trips on a day. There is no
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 106 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 basis for the Claimant to make such assumptions.
Furthermore, there is no record available with the AT on the
basis of which such assumption could be made by the
Claimant for the purposes of its calculations.

jj. In such a scenario, left with no other option, the AT

proceeded to make an independent enquiry by issuing
necessary directions in this regard to the IE vide Minutes of
Meeting for proceeding i.e. 24th & 25 hearing date 8 & 9th
August 2019. During the said hearing, as a sample test, the
AT directed the Independent Engineer to check the record for
the month of June 2019 to assess the LPT & LCT vehicles
actually passing through TP-1 and TP-2. The month of June
was chosen in order to ensure that there is no manipulation of
the data in any manner whatsoever. Further, the IE was also
directed to assess the corresponding revenue for these two toll
booths for the month of June 2019.

kk. During the 30th & 31st hearing held on 31.10.2019, the
Respondent submitted a letter from the IE enclosing the copy
of the report thereby giving the details of traffic volumes of
LPT and LCT vehicles passing through TP-1 and TP-2 for the
month of June 2019 (Exhibit C-103) as were sought by the
AT during its 24th & 25th hearing.

ll. From a perusal of said report, it is clear that at an

average about 68% of the LPT vehicles and 64% of LCT
vehicles registered by the claimant were undertaking 2 trips
(up and down) per day across the two Toll Plazas. It is the
fact that the claimant submitted the required data to the
Respondent/IE as per contract requirements but no action was
taken in this regard.

mm. In view of the above, the AT during the 36th, 37th and
38th hearing held on 11th and 12th January 2020 directed the
Claimant to submit detailed calculations in support of the
present claim. The Respondent was also given an opportunity
to verify the said calculation. In response thereto, the claimant
has submitted detailed calculations vide its letter dated
26.01.2020 (also as Annexure (1) of Written Submission) and
arrived at an extension of 414 days to the Concession Period
with respect to revenue loss on account of discounted Toll fee
rate to LPT & LCT vehicle since PCOD.
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 107 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 nn. In the said calculation, in order to compute the loss
suffered by the Claimant on account of concession provided
to LPT and LCT, the Claimant placed reliance upon the
Average Growth Rate (AGR) achieved in the Project
Highway along with the IE’s Report dated 17th September
2019 mentioned hereinabove. On the basis of the said report,
the claimant has worked out the percentage trip of LPT &
LCT vehicles, which comes out to 64% for LPT and 36% for
LCT vehicles.

oo. On the basis of the said report, the Claimant had

calculated the average loss per day being suffered by the
Claimant in the month of June 2019 on account of the
Concession/discount provided to the Local Traffic. For the
said purpose, the Claimant firstly took the actual Toll Rate for
crossing one toll plaza which was liable to be paid by a
particular category of vehicle and thereafter, subtracted the
Applicable Rate after discount which was prescribed by the
Respondent in furtherance of the Supplementary Agreement
to arrive at the loss being suffered by the Claimant for each
such trip. The said figure was multiplied with the number of
trips in the particular category as provided for in the IE’s
report as reproduced hereinabove. By following the said
procedure, the Claimant arrived at the average daily loss
being suffered by the Claimant in the month of June, 2019
which came to an amount ₹of 1,78,045/ -(₹ 1,11,600/- for
LPT and ₹ 66,445/- for LCT). The detailed calculation in that
regard was reflected in “Sheet A” of the Exact File attached
along with the Letter dated 26.01.2020.

pp. Thereafter, for the purposes of computing the Revenue

Growth Rate, the Claimant calculated the percentage
difference (increase/decrease) in the toll collection for the
project highway (i.e. TP-1 as well as TP-2) for each
subsequent year from the year 2004-05 onwards till 2018-19
and on the basis thereof, the Average Growth Rate (AGR) for
the project worked out to 10.26% as per the past trend of the
revenue growth. The same was reflected in the “Sheet B” of
the Excel File attached with the said Letter dated 26.01.2020.

qq. Lastly, on the basis of the average per day loss being
suffered by the Claimant in the month of June, 2019 (Sheet
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 108 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 A) read with the AGR of 10.26% (Sheet B), the Claimant had
done back calculation and forward calculation to arrive at the
Average per day loss being suffered by the Claimant for each
year since 2004 till 2021. The same was reflected in the
“Sheet C” of the Excel File attached with the said Letter dated
26.01.2020.

rr. Lastly, the Claimant divided the average loss per day
for each year with the average daily toll collection per day for
that particular year in order to arrive at the average per day
extension of time which the Claimant was entitled to for that
particular year as has been reflected in the snapshot of “Sheet
C” hereinabove. The same was multiplied by 365 to arrive at
the extension of time for the entire in question and the sum
total thereof was the total extension of the Concession Period
to which the Claimant was entitled.”

136. The objections of NHAI to the aforesaid computation, by JTR,

of the extension of the Concession Period, to which it was entitled,
were found, by the learned Arbitral Tribunal, to be without substance.

137. On the basis of the above, the learned Arbitral Tribunal

awarded, to JTR, against Claim 4, extension of 414 days in the
Concession Period originally envisaged in the CA.

Rival Submissions before this Court

138. Mr. Mittal contends, at the outset, that the learned Arbitral
Tribunal could not have awarded any compensation, including
extension of the Concession Period for the period prior to 10 July
2006, in view of the specific stipulation, in the minutes of the meeting
held on 5 May 2006, that no compensation on account of loss of
revenue would be payable to JTR prior to the date of the
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 109 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 supplementary CA, which was executed on 10 July 2006.

139. Mr. Mittal submits that the manner in which the learned
Arbitral Tribunal proceeded to allow JTR’s Claim 4 was completely
foreign to the law. It is pointed out that JTR filed as many as four
computations of the amount due to it under Claim 4. The first was
filed in July 2018, an addendum thereto was filed in August 2019, a
third computation was filed on 23 August 2019 and a fourth
computation was filed after the award was reserved on 26 January
2020. Of these, Mr. Mittal submits that the learned Arbitral Tribunal
rejected the first two computations filed in July 2018 and its
addendum in August 2019 and completely ignored the third
computation filed on 23 August 2019. It relied entirely on the fourth
computation dated 26 January 2020, filed after the award was
reserved. Mr. Mittal submits that the learned Arbitral Tribunal acted
in fundamental and fatal error of law and procedure by awarding
Claim 4 on the basis of the said belated computation dated 26 January
2020, after the award had been reserved. It is submitted that, in fact,
the said computation was filed practically on invitation as, in the
minutes of the hearing dated 12 January 2020, while reserving award,
the learned Arbitral Tribunal, suo moto, directed JTR to file detailed
calculations in respect of Claim 4. This prompted JTR to file an
entirely new computation on 26 January 2020, completely alien and
divorced from the computations earlier filed by it, incorporating a
completely new method of calculating its alleged entitlements.

140. Apart from the fact that JTR could not have thus provided an
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 110 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 entirely new and hitherto unseen method of computing Claim 4, Mr.
Mittal submits that, when attempts were made to verify the figures in
Claim 4, by reference to actual server data, JTR placed every possible
hurdle in the way of ascertainment. Ultimately, NHAI was provided
server data only for four days i.e., 12 May 2019, 10 January 2020, 11
January 2020 and 22 February 2020, on all of which dates no
transaction relating to any LPT or LCT vehicle was found. When
NHAI attempted to establish this position by placing on record
photographs of the server data for the said dates, the learned Arbitral
Tribunal refused to entertain the photographs treating them as new
documents.

141. NHAI categorically disputes JTR’s contention that it was

granting any concession whatsoever to LPT and LCT vehicles. The
limited Schedule M records, which had been filed by JTR, did not
reflect any concession being granted to LCT vehicles. In fact, JTR had
admitted, in its letter dated 9 July 2009 that no concession to LCT
vehicles was envisaged either in the CA or in the Supplementary CA.
The IE had also acknowledged, in its letter dated 15 May 2013, that
JTR was not granting any concession to LCT vehicles. Even the
calculations made by the IE dated 5 March 2010, which the learned
Arbitral Tribunal found to be in order, did not take into account any
concession being granted to LCT vehicles.

142. Mr. Mittal further submits that the learned Arbitral Tribunal
could not have shifted, on to NHAI, the onus to provide data to work
out the entitlement of JTR to extension of the Concession Period
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 111 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 against Claim 4. It was for the claimant to prove its claim, and not for
the respondent to aid in that regard. NHAI had clearly highlighted
errors in the calculations of JTR.

143. Mr. Mittal further points out that there was no material to
indicate that NHAI had ever extended concession in the toll fees to
LCT vehicles. In the letter dated 1 July 2009, written by JTR by way
of protest to the notification dated 30 June 2009, fixing toll fees, JTR
specifically stated that NHAI’s decision to grant concessional fees
was only applicable to LPT vehicles and not to LCT vehicles. Thus,
JTR was also fully aware of the fact that LCT vehicles were not
entitled to concessional fees. The fact that no such concessional fees
were being charged from LCT vehicles was also manifest from letter
dated 9 July 2009 30 from JTR to NHAI. Even after 2009, there was no
correspondence from JTR, to the effect that it was charging
concessional fees from LCT vehicles. The report dated 5 March 2010
of the IE, too, indicated that loss had been suffered by JTR only due to
concession granted to LPT vehicles. The recommendation of the IE to
award 65 days extension in the Concession Period to JTR for the loss
of revenue suffered on account of charging of concessional toll fees
from LPT vehicles was found, by the learned Arbitral Tribunal, in
para 177(ee) of the impugned award to be in order. Further, in its
subsequent communication dated 15 May 2013 to NHAI, the IE had
again specifically noted that concession to LCT was not being
implemented by JTR till that date. Mr. Mittal also drew attention to
Clause 19.4 of the CA which required JTR to furnish, to NHAI,

30
Refer para 30 supra
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 112 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 within 7 days of the completion of each calendar month during the
operation period, a statement of fees in the form provided in Schedule
M. The Schedule M statements submitted by JTR to NHAI at that
time, too, he points out, made reference only to LPT vehicles and not
to LCT vehicles.

144. The learned Arbitral Tribunal had, therefore, in Mr. Mittal’s

submission, materially erred in proceeding on the premise that JTR
had charged concessional toll fees from LCT vehicles.

145. Apropos the calculations submitted by JTR on 26 January 2020,

which stand accepted by the learned Arbitral Tribunal in the
impugned award, Mr. Mittal highlights the various new features in the
said calculations, such as Average Growth Rate and Revenue Growth
Rate, which, prior thereto, did not find any mention in the
proceedings. The manner in which JTR worked out its alleged
entitlement, in the calculations submitted on 26 January 2020, submits
Mr. Mittal, was entirely foreign to the calculations submitted prior
thereto. The basis on which JTR worked out the said calculations was
neither ever pleaded nor argued. Besides, he submits that JTR could
not have, merely on the basis of the figures of one month, i.e. June
2019, averaged and worked out the entire figures of toll collected
from 2004 up till 2021 and ascertain its entitlement on that basis.
Nonetheless, in order to ascertain the veracity of the manner in which
JTR had worked out its alleged entitlement, NHAI visited the toll
plazas.

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 113 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 146. JTR, without any justification, did not make available, to
NHAI, the server data for the period of Claim 4, except for four days,
on which date no transaction relating to LPT or LCT was found to
have taken place. Placing all these facts on record, NHAI filed a
supplementary rejoinder before the learned Arbitral Tribunal on July
2020, but the learned Arbitral Tribunal declined to pay any heed
thereto. Rather, he submits that para 177(qq) of the impugned award
reproduces, in extenso, the calculations submitted by JTR on 26
January 2020 and treats them as gospel truth. Apropos the material
provided by NHAI thereafter, the learned Arbitral Tribunal held thus,
in para 177(zz):

“zz) The reports and documents filed subsequently by the

Respondent under the said Application dated 07.05.2020, amended
application dated 13.05.2020, its rejoinder and supplementary
rejoinder are being introduced for the first time. That apart, the
submissions now being advanced by Respondent under said
Applications are in contradiction of Respondent's own submission
in Exhibit C-103. They are also not reviewed and concurred by the
authorised representative of IE. As such, Respondent's contentions
cannot be accepted. The Respondent's said Applications are,
therefore, rejected. The reliefs sought by the Respondent in the
aforesaid Application under prayer clause (b) and (c) cannot be
entertained at this belated stage and the same are hereby not
accepted.”

147. Mr. Mittal has also faulted the learned Arbitral Tribunal with
respect to its finding on the aspect of charging of concessional fees by
JTR from LPT vehicles, which reads as under:

“v) The Respondent has relied upon Clause 2.3 of the

Supplementary Agreement to contend that the same refers to only
Local Personal Traffic and as such, the Claimant is not entitled to
any compensation on account of any concession granted to Local
Commercial Traffic. Per Contra, the Claimant has sought to
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 114 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 contend that the same is a result of a typographical error. Be that as
it may, upon a reading of the Supplementary Agreement as a whole
coupled with a perusal of the User Fee Notification discussed
hereinabove, once it is seen that the Claimant was made to charge a
concessional rate form the Local Commercial Traffic as well as the
Local Personal Traffic under the terms of the Supplementary
Agreement, there is no doubt that the Claimant is entitled to be
compensated for the concession granted to the Local Commercial
Traffic as well and not just Local Personal Traffic. This question is
also accordingly decided in favor of the Claimant and against the
Respondent.”

148. Responding to the submissions of Mr. Mittal, Mr. Rajshekhar

Rao, learned. Counsel for JTR placed reliance on a legal opinion
dated 26 August 2011 by M.V. Kini & Company, the external
Counsel of NHAI, in which it was observed that JTR was entitled to
compensation on account of losses suffered because of charging of
concessional tool fees both from LCT vehicles as well as LPT
vehicles. He also relies, in this context, on Clause 2.3 of the
Supplementary CA, in which it was noted that “the loss of revenue to
the concessionaire from the implementation of this supplementary
agreement… shall be computed for quantifying the total losses”. The
losses suffered by JTR, from the date of the Supplementary CA were
not, therefore, restricted to LPT, but covered all losses including those
relatable to LCT vehicles.

149. Mr. Rao further points out that NHAI was required to form a
committee to quantifying the losses suffered by JTR, as per Clause 2.3
of the Supplementary CA, but that was never done.

150. With respect to the objection of Mr. Mittal, to the computation

of its entitlement, submitted by JTR on 26 January 2020, Mr. Rao
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 115 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 submits that JTR had merely worked out its liability on the basis of
the methodology adopted by the IE, which had already received the
commendation of the learned Arbitral Tribunal in its order dated 8 and
9 August 2019. Mr. Rao places reliance on the judgment of the
Supreme Court in Vijay Karia v. Prysmian Cavi E Sistemi SRL 31.
Besides, submits Mr. Rao, the methodology adopted in the
submissions dated 26 January 2020, was already forthcoming in the
SOC filed by JTR. In this context, he relies on para 48 of the SOC
which reads thus:

“48. That, the Claimant had worked out the extension of the
Concession Period, which it was entitled to due to the Local
Personal & Commercial Traffic and communicated, considering
the following factors:

a) The growth of the Local Personal & Commercial Traffic

year after year.

b) The increase in toll charges with respect to Wholesale Price

Index (WPI) every year till the end of the Concession Period.

c) Compounding factor and calculating of the concessions to

be given to the Claimant.

d) Compounding to the number of days of extension till the

year 2021.

The Claimant taking the above consideration, while determining

the compensation till 2021 i.e. till expiry of the Concessionaire
Agreement, the total loss of revenue in term of extended days, may
exceed more than 3 years of the Concession Period.”

151. Mr. Rao submits that the methodology adopted by JTR was
essentially merely multiplying the number of vehicles which plied
through the toll plazas into the compensation payable per vehicle and

31
2020 11 SCC 1
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 116 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 dividing the multiple by the average collection per day to work out the
number of days of extension of the Concession Period to which JTR
was entitled.

Findings

152. Having considered the submissions of learned Counsel on both

sides and applied myself to the material on record, the findings of the
learned Arbitral Tribunal with respect to Claim 4, in my opinion,
suffer from patent illegality within the meaning of Section 34(2A) of
the 1996 Act, and are also markedly perverse. I say so for three
reasons.

153. Firstly, and most importantly, the learned Arbitral Tribunal

fatally erred in allowing JTR to place, before it, on 26 January 2020, a
computation based on a methodology which was completely diverse
from the methodology adopted in all earlier computations provided by
JTR with respect to its alleged entitlement in Claim 4. The submission
of Mr. Rao that the computation was merely an extrapolation from the
manner in which the IE had worked out the number of vehicles which
passed the toll plazas, and that it was also forthcoming in para 48 of
the SOC submitted by JTR does not commend itself to acceptance. It
is apparent, at a plain reading, that an entirely new method of working
out its entitlement, including concepts of Average Growth Rate and
Revenue Growth Rate, which never figured in any earlier worksheet,
discussion or submission during the arbitral proceedings, was evolved
by JTR. It is a matter of deep concern that the said worksheet was
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 117 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 bodily incorporated into para 177(qq) of the impugned award, which,
as Mr. Mittal correctly states, treats the working as gospel truth,
without any investigation into its justification. I am completely
unaware of any methodology by which the figures of movement of
vehicles during one single month of June 2019 could be used as an
average to work out the movement of vehicles for a period of 17 years
from 2004 to 2021. No principle of averaging, known to statistics, in
my view, supports such a calculation. The basic principle of averaging
is that there must be a representative sample on the basis of which an
average can be drawn. The movement of vehicles in the single month
of June 2019 cannot, by any stretch of imagination, be regarded as a
representative sample for the movement for vehicles across the toll
plazas for a period of 17 years from 2004 to 2021. The most
fundamental premise on which JTR had worked out its entitlement, in
its submissions dated 26 January 2020 was itself, therefore,
completely flawed. The learned Arbitral Tribunal has, however,
completely overlooked this fatal infirmity in the calculation submitted
by JTR on 26 January 2020.

154. It is not for this Court to enter into the specifics or the
arithmetic of the calculations advanced by JTR. If the calculations
were otherwise permissible, then this Court, in exercise of the
jurisdiction vested in it by Section 34 of the 1996 Act, would not
apply itself to the math, to discern whether the calculations past
muster. In the present case, however, the calculations were provided
for the first time after award was reserved on 26 January 2020. It
cannot be said, in my view, that NHAI had any reasonable
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 118 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 opportunity to rebut the calculations, as the calculations proposed a
method of working which was foreign to the methods adopted by JTR
prior thereto. NHAI justifiably requested JTR, in the circumstances, to
make available the server data for the period 2004 to 2021, so as to
verify the acceptability of the figures on the basis of which JTR had
worked out its entitlement.

155. It has to be noted, here, that there is no provision in the CA, or

in the Supplementary CA, which provides for working out the
entitlement of JTR, either to compensation or to extension in the
concession period, on the basis of averaging. The entitlement has to
be based on actuals and not on averages. The very resort, by JTR, to
the process of averaging was, therefore, foreign both to the CA as well
as to the Supplementary CA and could not, even on that basis, have
been approved by the learned Arbitral Tribunal.

156. On visiting the toll plazas, NHAI was not provided the server
data except for four dates, on which dates NHAI found that there was
no data relating to LCT or LPT vehicles. There was, therefore, every
justification for NHAI to contend that the very premise on the basis of
which JTR had worked out its entitlement in Claim 4 was highly
suspect. It is inconceivable as to how, in the absence of any data
regarding the actual movement of vehicles during the periods in
question, the learned Arbitral Tribunal went ahead and approved the
manner in which JTR had chosen to work out its entitlement on the
basis of a new process of averaging.

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 119 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 157. The manner in which the learned Arbitral Tribunal proceeded in
the present case was, therefore, not only fundamentally procedurally
flawed, but was also in stark violation of the most basic principles of
natural justice and fair play. Not only was NHAI deprived of an
opportunity to contest the manner in which JTR had worked out its
entitlement; the supplementary submissions/rejoinder filed by NHAI
before the learned Arbitral Tribunal, in which all these facts were
pointed out, was also accorded short shrift, as having been filed after
the award was reserved and in the nature of an afterthought. This was
in stark contradiction to the accommodation extended by the learned
Arbitral Tribunal to JTR, allowing it to present, for the first time after
the arbitral award was reserved, a new methodology to work out its
entitlement. This Court is, therefore, constrained, albeit reluctantly, to
record that the learned Arbitral Tribunal has not been consistent in its
approach to the parties before it. The goose and the gander have, as it
were, been treated unequally.

158. While the above infirmity is sufficient, on its own, to set aside
the impugned award, insofar as it grants Claim 4 of JTR, there are two
other infirmities in the manner in which the learned Arbitral Tribunal
has proceeded.

159. The second infirmity in the impugned award, insofar as it

decides Claim 4, is that the learned Arbitral Tribunal has proceeded
on the premise that concessional toll rates had, in fact, been charged
by JTR both from LPT as well as LCT after the execution of the
Supplementary CA. NHAI had drawn attention to various
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 120 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 communications between the parties, as well as reports of the IE,
already noted supra, which clearly indicated that no concession had
been granted by JTR to the LCT vehicles. In the absence of any
material to indicate that actual concession had been extended by JTR
to the LCT vehicles, the learned Arbitral Tribunal could not have
compensated JTR in the regard.

160. The third infirmity in the findings of the learned Arbitral

Tribunal, insofar as Claim 4 is concerned, is in the learned Arbitral
Tribunal failing to take stock of the minutes of the meeting dated 5
May 2006 in which it was clearly decided that JTR would not be
entitled to any compensation or extension in the Concession Period
for losses suffered prior to execution of the Supplementary CA on 10
July 2006. In this regard, the learned Arbitral Tribunal has merely
noted that, in the minutes of the meeting dated 24 February 2010,
NHAI was required to decide on the issue of granting compensation to
the claimant for the period between the PCOD and the execution of
the Supplementary CA. That, however, cannot override the decision
taken in the meeting dated 5 May 2006, in which it was made
absolutely clear that JTR would not be entitled to any compensation
or extension in the Concession Period for losses suffered prior to the
execution of the Supplementary CA on 10 July 2006. The Claim for
the period prior to 10 July 2006 was, therefore, in any event, liable to
be rejected.

161. It was probably for this reason that JTR had never, in any of its
computations prior to the computation submitted on 26 January 2020,
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 121 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 sought for any extension of Concession Period for losses suffered
prior to 2007. The period of 2004 to 2007 was introduced for the first
time in the said computations. The learned Arbitral Tribunal,
therefore, materially erred even on that score.

162. Equally, it was for the first time in the computations dated 26
January 2020 that JTR included a claim for the period 2019 to 2021,
which was never earlier claimed. The learned Arbitral Tribunal was
clearly in error even in allowing this part of the claim.

163. On an overall perspective, therefore, I am constrained to hold

that, in deciding Claim 4 of JTR, the learned Arbitral Tribunal acted
with patent illegality, perversity and also without proper application of
mind. Differential treatment has also been extended, with respect to
the said claim, to JTR, vis-à-vis NHAI. The manner in which the
learned Arbitral Tribunal has proceeded in the matter of Claim 4
cannot sustain the scrutiny of facts or law. As such, it clearly merits
interference, under Section 34(2a) of the 1996 Act.

164. Resultantly, the impugned award, insofar as it allows Claim 4

of JTR, is set aside.

Re. Claim 5

165. Vide Claim 5, JTR claimed extension of the Concession Period

owing to three events, all of which it alleged to be indirect political
force majeure events, i.e. (i) transporters strike from 20 August 2004
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 122 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 to 29 August 2004, (ii) sand lorry transporters strike from 20 June
2005 to 4 July 2005 and (iii) agitations owing to the Kaveri water
disputes between the states of Karnataka and Tamil Nadu. A total
period of 15 days’ extension was sought.

166. Before the learned Arbitral Tribunal, JTR contended that,

owing to the aforenoted events, transport of all kinds of vehicles from
adjoining states were affected, resulting in an indirect political force
majeure event within the meaning of Clause 29.3 of the CA.
Inasmuch as the force majeure event had occurred after the COD, and
lasted for more than 7 days, JTR contended that it was entitled to
extension of the Concession Period under Clause 9.6 of the CA. For
the purposes of its claim for extension in the Concession Period on
account of the nationwide Transporters Strike and the Sand Lorry
Transporters strike, JTR relied on the opinion dated 10 October 2007
of the IE and letter dated 10 April 2017 from the Project Director,
NHAI to the CGM. During these periods, it was contended that an
entire category of vehicles were prevented from plying on the Project
Highway.

167. JTR also contested the justifiability of NHAI’s contention that

force majeure could be said to exist only if there was complete stop in
the plying of vehicles and not where there was partial stoppage of
traffic. For this purpose, JTR placed reliance on Clause 29.13 of the
CA, which envisaged the existence of force majeure if the
circumstances rendered the affected party wholly or partially unable
to perform its obligation under the CA. Reliance was also placed, by
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 123 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 JTR, on Clause 29.6(c) of the CA.

168. NHAI contended, per contra, that JTR’s claims were barred by
time. On merits, the applicability of Clause 29.13 of the CA was
contested on the ground that it applied only where the concessionaire
was prevented from collecting toll fees, or where there was
suspension from such collection. Neither of these circumstances
applied in the present case, as every vehicle, which passed either of
the toll plazas, was required to pay full toll fee and it was only that a
particular category of vehicles was, owing to the strike, unable to ply.
NHAI also disputed the calculation, by JTR, of its losses on account
of the alleged force majeure on the basis of the revenue collected in
the period immediately preceding the period of force majeure which,
according to NHAI, was not permissible in view of Clause 29.7 of the
CA. Reliance was also placed, by NHAI, on Clause 29.1 of the CA,
to contend that the CA was required to plead that it had taken steps to
overcome the force majeure, before seeking any reliefs on that basis.

169. JTR, in rejoinder, relied on para 49 of the SOD, in which NHAI

had stated that it was a “matter of record that the toll collection in the
above said period was drastically reduced and claimant suffered
revenue losses”. The fact that the force majeure events had a material
adverse effect on the performance of the CA by JTR was, therefore,
admitted. It was further submitted that Clause 29.13 of the CA
included, in the definition of force majeure, events which led to
partial prevention or partial suspension of performance of the CA.
Moreover, both the IE and the Project Director examined the claims of
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 124 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 JTR and acknowledged that it had actually suffered revenue losses on
account of the National and the sand lorry transporters strikes and was
entitled to be compensated in that regard.

Findings of the learned Arbitral Tribunal

170. The learned Arbitral Tribunal held, on the aspect of limitation,

that the issue stood covered by its findings on the issue in respect of
Claim 1. Further, in view of the admission contained in para 49 of the
SOD filed by NHAI, that it was a matter of record that, during the
aforesaid period, toll collection had drastically reduced and revenue
losses had been suffered by JTR, the learned Arbitral Tribunal held
that the only issue that remains to be considered was whether these
events constituted force majeure within the meaning of the CA.

171. In this regard, the learned Arbitral Tribunal observed that

Clauses 29.3(ii) and (iii) of the CA covered, within the ambit of the
expression “force majeure”, events such as industrywide strikes or
statewide strikes. However, the contention of NHAI was that the
events forming subject matter of this claim could not be regarded as
force majeure as they had resulted only in partial
prevention/suspension of toll collection on the Project Highway.

172. On this aspect, the learned AT accepted the submission of JTR

that Clause 29.13 included, within the ambit of “force majeure”,
events which rendered the affected party wholly or partially unable to
perform its obligations under the CA. Thus, even a partial suspension
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 125 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 or partial prevention, hindering the performance of its obligations
under the CA, would constitute force majeure, insofar as JTR was
concerned.

173. Thereafter, however, paras 227(i) to (k) of the impugned Award

read thus:
“i) As has been rightly pointed out by the Claimant, the IE
vide Exhibit C-14 and the Project Director of the Respondent vide
Ex. C-89 have admitted the Claim for extension on account of
Transporter’s Strike and Sand Lorry Transporter’s Strike as raised
by the Claimant and observed that the Claimant was entitled to an
Extension of the Concession Period by 5 days and 1 day
respectively on account of said Force Majeure Events. Further,
neither party has ever disputed the finding/award delivered by the
IE in terms of Clause 20.8 of the Concession Agreement. As such,
both parties are now bound by it.

j) With regard to the extension on account of Kaveri Water

Issue, the Claimant vide Letter dated 19.10.2016 (Exhibit C-36)
had brought the reduction in collection of toll fees to the notice of
the Respondent. Further, vide Letter dated 19.01.2017 (Exhibit C-
37), the Claimant has pointed out that the Claimant suffered
revenue losses to the tune of Rs. 88,72,590/– in the month of
September, 2016 due to the Kaveri Water Issue. Further, the
average daily revenue collection during the month of August, 2016
and October, 2016 was about Rs. 19.40 lakhs.

k) From the above figures, it can be seen that Rs 88,72,590/–

divided by Rs. 19.4 lakhs is about 4.5. As such, the Claimant has
rightly claimed an extension of 5 days on account of Kaveri Water
Issue.”

174. Following the above, the learned Arbitral Tribunal, in the

impugned Award, holds JTR entitled to extension of the Concession
Period by 9 days on account of the transporters’ strike, one day on
account of the sand lorry transporters’ strike and 5 days on account of
the Kaveri Water Issue, working out to a total of 15 days extension in
the Concession Period.
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 126 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 Rival Contentions before this Court

Submissions of NHAI

175. NHAI contends that the findings of the learned Arbitral

Tribunal ignore the expression “prevent collection of toll” in Clause
29.3 (ii) and “collection of fees remain suspended” in Clause 29.6(c)
of the CA. JTR, it is submitted, was neither prevented from collecting
toll fees during the period in question, nor was collection of toll fees
suspended. Toll fees were admittedly being collected from all
vehicles which crossed the toll plazas. Partial reduction of fee could
not justify grant of relief by way of extension in the Concession
Period. Extension of the Concession Period was envisaged, by Clause
29.6(c), only for the period during which the force majeure event
subsisted. In that view of the matter, it is submitted that the learned
AT has erred both in holding that JTR is entitled to plead force
majeure in respect of Claim 4, as well as in computing JTR’s
entitlement by converting the alleged loss into the number of days of
extension of the Concession Period. By doing so, NHAI submits that
the learned Arbitral Tribunal has rewritten the contract, which is
clearly proscribed in law as held by the Supreme Court in SEAMAC9 .

176. Clause 29.13 of the CA, submits NHAI, was completely

inapplicable, as it permitted exception to performance of the
claimant’s obligation, and not the reduction in toll collection.
Collection of toll was a right of JTR, under Clause 6 of the CA, and
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 127 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 not an obligation. Clause 29.13 could not, therefore, be used to
determine whether the events in question constituted force majeure.
Clauses 29.7 to 29.13 envisaged the reliefs to which a party would be
entitled in the event of force majeure, and did not stipulate the events
which would constitute force majeure.

177. Finally, NHAI has questioned the propriety of the grant, by the
learned Arbitral Tribunal, of 9 days extension of the Concession
Period against the nationwide strike, instead of 5 days as
recommended by the IE. It is submitted that the impugned Award
does not disclose any reason for the learned AT to rule contrary to the
recommendations of the IE.

178. JTR has not chosen to file any written submissions with respect
to Claim 5.

Findings

179. It is not necessary for me to enter into all aspects of the disputes
between the parties apropos Claim 5, as the impugned award is liable
to be set aside, qua the said Claim, even for the reason that it grants
extension of the Concession Period, to JTR, of 9 days for the
nationwide transporters strike which took place between 20 and 29
August 2004. There is no recommendation, by any authority,
recommending 9 days extension of the concession period on the said
account. The recommendation was for 5 days’ extension. Nor has
JTR, either in its oral arguments at the Bar, or in the written
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 128 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 submissions tendered by it, provided any support for its claim of 9
days extension of the concession period on account of the nationwide
transporters strike.

180. The judgment of the Supreme Court in M. Hakeem10

completely proscribes modification by the Court, while exercising
jurisdiction under Section 34 of the 1996 Act, of the impugned award,
qua any particular claim. The inexorable sequitur to the finding that,
in awarding 9 days extension of the concession period towards the
losses suffered by JTR on account of the nationwide transporters
strike, the learned Arbitral Tribunal has erred, is that the award, qua
Claim 5 has necessarily to be set aside in its entirety. Needless to say,
however, the parties may, if the law so permits, re-agitate this issue in
arbitration, in which event the findings of the learned Arbitral
Tribunal, in the present the impugned award, would not affect the
exercise of jurisdiction in the fresh arbitral proceedings, if at all
initiated.

Conclusion

181. Resultantly, the impugned award is upheld to the extent it

allows Claim 2 and set aside to the extent it allows Claims 4 and 5 of
JTR.

182. OMP (Comm) 185/2021 stands partly allowed, in the aforesaid

terms.

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 129 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 183. Inasmuch as, with consent, this judgment was restricted to
examining the sustainability of the impugned Award insofar as it
decided Claims 2, 4 and 5, list O.M.P. (Comm) 185/2021, along with
other pending applications, before the appropriate Bench as per roster
for hearing on other issues/claims, on 16 August 2023.

IA 8668/2021 [under Section 34(4)]

184. JTR has moved this application, seeking that, in the event that
this Court is inclined to set aside the impugned Award, insofar as it
allows Claim 4, this Court, instead of doing so, may adjourn the
proceedings so as to enable the learned Arbitral Tribunal to renew the
proceedings and cure the defect in its decision qua Claim 4.

185. Section 34(4) cannot be claimed as a matter of right, as is

apparent from the use, in the provision, of the expression “may”.
Discretion, therefore, vests with the Court as to whether, in a
particular case, jurisdiction under Section 34(4) ought, or ought not, to
be exercised. The provision cannot be made an avenue to avoid
illegal awards being set aside, and arbitral proceedings being renewed.

186. In the facts of the present case, it is not necessary for me to

enter into the niceties and intricacies of Section 34(4). The provision
has been invoked, by JTR, only with respect to the decision of the
learned Arbitral Tribunal on Claim 4. Insofar as the said decision is
concerned, the learned Arbitral Tribunal has returned findings, on
merits, with respect to JTR’s entitlement to extension of the
Signature Not Verified
O.M.P. (COMM) 185/2021 Page 130 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37
 Concession Period on account of the alleged losses suffered because
of charging of concessional rates of toll fee from LCT and LPT
vehicles. Section 34(4) it is only intended to cater to situations in
which there is a formal defect of procedure, in the manner in which
the learned Arbitral Tribunal has acted, which is capable of
rectification. The provision cannot be used as a means for the learned
Arbitral Tribunal to review its Award, no power of review being
envisaged by the 1996 Act.

187. Allowing JTR’s application would amount to granting the

learned Arbitral Tribunal the power to review its Award, qua Claim 4.
In my considered opinion, Section 34(4) cannot be employed for such
a purpose.

188. IA 8668/2021 is, therefore, rejected.

C. HARI SHANKAR, J.
JULY 31, 2023
ar/rb/dsn

Signature Not Verified

O.M.P. (COMM) 185/2021 Page 131 of 131
Signed By:HARIOM
Signing Date:02.08.2023
14:11:37