NATIONAL HIGHWAYS AUTHORITY OF INDIA Vs. BUMIHIWAY DDB LTD
LAWS(SC)-2006-9-84
SUPREME COURT OF INDIA (FROM: ORISSA)
Decided on September 25,2006

NATIONAL HIGHWAYS AUTHORITY OF INDIA Appellant
VERSUS
BUMIHIWAY DDB LTD. Respondents





Cited Judgements :-

METRO BUILDERS (ORISSA) PVT LTD VS. INDIAN OIL CORPORATION LTD & ORS [LAWS(DLH)-2011-10-286] [REFERRED]
BAGHEL INFRASTRUCTURES PVT. LTD. VS. N.T.P.C. LTD. AND ORS. [LAWS(ALL)-2014-11-298] [REFERRED TO]
NATIONAL HIGHWAY AUTHORITY OF INDIA VS. KISHANGARH GULABPURA TOLLWAY LIMITED [LAWS(DLH)-2021-10-21] [REFERRED TO]
TRICOLOR HOTELS LIMITED VS. DINESH JAIN [LAWS(DLH)-2022-11-252] [REFERRED TO]
LDK SOLAR HI-TECH(SUZUHOU) CO LTD VS. HINDUSTAN CLEANENERGY LIMITED (FORMERLY MOSER BEAR CLEAN ENERGY LIMITED) [LAWS(DLH)-2018-7-64] [REFERRED TO]
M/S. RAMKY ENERGY AND ENVIRONMENT LIMITED VS. THE KOTTAYAM MUNICIPALITY [LAWS(KER)-2018-11-429] [REFERRED TO]
TEXFIELD ENGINEERS MANAGING PARTNER T CHANDRAMOHAN COIMBATORE VS. TEXTEEMA ENGINEERING INDUSTRIES A PARTNERSHIP FIRM COIMBATORE [LAWS(MAD)-2010-3-637] [FOLLOWED ON]
M/S GANGA CONSTRUCTION COMPANY VS. UNION OF INDIA [LAWS(MPH)-2015-4-72] [REFERRED TO]
M C SHARMA ASSOCIATES CONSULTANTS PVT LTD VS. RAJASTHAN URBAN INFRASTRUCTURE AND FINANCE DEVELOPMENT CORPORATION LTD & ANR [LAWS(RAJ)-2015-10-152] [REFERRED]
H.P. MAHILA VIKAS NIGAM VS. JERATH ELECTRONICS AND ALLIED INDUSTRIES [LAWS(HPH)-2010-11-191] [REFERRED TO]
CENTRAL MINE PLANNING & DESIGN INSTITUTE LTD VS. SHRI SAURAV AGRAWAL [LAWS(CHH)-2012-2-77] [REFERRED TO]
IVRCL LIMITED VS. UNION OF INDIA [LAWS(KER)-2015-4-141] [REFERRED TO]
M/S. LARSEN & TOUBRO LIMITED VS. M/S. NATIONAL HIGHWAYS AUTHORITY OF INIDA [LAWS(DLH)-2020-11-15] [REFERRED TO]
MAX INDIA LTD VS. GENERAL BINDING CORPORATION [LAWS(DLH)-2009-7-38] [REFERRED TO]
M/S METRO BUILDERS (ORISSA) PVT. LTD. VS. INDIAN OIL CORPORATION LTD. & ORS. [LAWS(DLH)-2011-10-189] [REFERRED TO]
M/S. HIRA STEEL LIMITED VS. M/S. PRASANNA V. GHOTAGE [LAWS(BOM)-2013-12-193] [REFERRED TO]
AROHI INFRASTRUCTURE PVT. LTD. & ORS. VS. TATA CAPITAL FINANCIAL SERVICES LTD. [LAWS(BOM)-2015-10-278] [REFERRED TO]
UTKAL GALVANIZERS LTD. VS. POWER GRID CORPORATION OF INDIA LTD. [LAWS(DLH)-2014-11-46] [REFERRED TO]
SURESH CHAND AGARWAL VS. MAHESH KUMAR [LAWS(ALL)-2013-3-145] [REFERRED TO]
PARAMOUNT LIMITED VS. ION EXCHANGE (INDIA) LIMITED [LAWS(BOM)-2023-8-327] [REFERRED TO]
TECHNO ELECTRIC AND ENGINEERING COMPANY LIMITED VS. BENGAL ENERGY LIMITED [LAWS(CAL)-2021-7-62] [REFERRED TO]
VIDYAWATI CONSTRUCTION COMPANY VS. UNION OF INDIA [LAWS(ALL)-2020-11-45] [REFERRED TO]
KULJIT SINGH VS. ENGINEERING PROJECTS INDIA LTD [LAWS(DLH)-2007-11-77] [REFERRED TO]
BIPROMASZ BIPRON TRADING SA VS. BHARAT ELECTRONICS LIMITED [LAWS(SC)-2012-5-40] [REFERRED TO]
ISHVAKOO (INDIA) PVT LTD. VS. NATIONAL PROJECTS CONSTRUCTION CORPORATION LTD [LAWS(DLH)-2013-5-457] [REFERRED TO]
S B CONSTRUCTION COMPANY VS. U P RAJYA VIDYUT UTPADAN NIGAM LTD AND 4 OTHERS [LAWS(ALL)-2014-11-375] [REFERRED TO]
SHANE DUFF VS. ESSEL SPORTS PRIVATE LIMITED [LAWS(BOM)-2013-1-71] [REFERRED TO]
DEEPAK GOEL VS. AVINASH CHANDRA AND ORS. [LAWS(ALL)-2020-2-445] [REFERRED TO]
SAI JITESH CONSTRUCTION P LTD VS. Y VIJAYALAKSHMI [LAWS(APH)-2011-2-40] [REFERRED TO]
SAI JITESH CONSTRUCTIONS (P) LIMITED VS. Y. VIJAYALAKSHMI [LAWS(APH)-2011-2-94] [REFERRED TO]
LOMBARDI ENGINEERING LIMITED VS. UTTARAKHAND JAL VIDYUT NIGAM LIMITED [LAWS(SC)-2023-11-6] [REFERRED TO]
AGNI CONSTRUCTIONS PVT. LTD. VS. GNB BROTHERS PVT. LTD. [LAWS(DLH)-2009-2-247] [REFERRED TO]
GMR AMBALA CHANDIGARH EXPRESSWAYS PVT LTD VS. NATIONAL HIGHWAY AUTHORITY OF INDIA [LAWS(DLH)-2018-3-34] [REFERRED TO]
FOOD CORPORATION OF INDIA VS. P.ROY & CO [LAWS(ALL)-2021-9-97] [REFERRED TO]
DABUR INDIA LIMITED VS. UNION OF INDIA AND 2 OTHERS [LAWS(ALL)-2016-9-90] [REFERRED]
INDIA HOUSEHOLD AND HEALTHCARE LTD VS. L G HOUSEHOLD AND HEALTHCARE LTD [LAWS(SC)-2007-3-117] [REFERRED TO]
KUNCHAM VENKAT REDDY VS. M. L. V. SATYANARAYANA [LAWS(TLNG)-2021-7-51] [REFERRED TO]
G G HOSPITAL VS. LARSEN AND TOUBRO LIMITED [LAWS(MAD)-2014-2-176] [REFERRED TO]
BANGLORE HOUSING DEVELOPMENT AND INVESTMENT VS. IBC KNOWLEDGE PARK PVT LTD [LAWS(KAR)-2009-10-36] [REFERRED TO]
CG TOLLWAY LIMITED VS. NATIONAL HIGHWAY AUTHORITY OF INDIA [LAWS(DLH)-2021-10-39] [REFERRED TO]
IRB AHMEDABAD VADODARA SUPER EXPRESS TOLLWAY PRIVATE LIMITED VS. NATIONAL HIGHWAYS AUTHORITY OF INDIA [LAWS(DLH)-2020-8-116] [REFERRED TO]
MAYUR ASSOCIATES, ENGINEERS & CONTRACTORS, VS. MR. GURMEET SINGH, GENERAL MANAGER [LAWS(RAJ)-2016-10-116] [REFERRED TO]
MEERA GOYAL VS. PRITI SARAF [LAWS(DLH)-2023-12-12] [REFERRED TO]
SHYAM SUNDER AGARWAL VS. P NAROTHAM RAO [LAWS(APH)-2011-7-59] [REFERRED TO]
M R RAGHURAM VS. M R JAYARAM [LAWS(KAR)-2013-9-56] [REFERRED TO]
M. RATNAVARMA PADIVAL AND ORS. VS. M/S BALLAL AND PADIVAL TILES POST GANJIMUTT MANGALORE TALUK [LAWS(KAR)-2018-1-222] [REFERRED TO]
SHRI R.B. RAJESH VS. THE CHIEF ENGINEER AND OTHERS [LAWS(CAL)-2018-6-191] [REFERRED TO]
INLAND VIKAS LIMITED VS. CENTRAL INLAND WATER TRANSPORT CORPORATION LTD [LAWS(CAL)-2014-8-172] [REFERRED TO]
NEW INDIA ASSURANCE COMPANY LIMITED VS. KHANNA PAPER MILLS LIMITED [LAWS(DLH)-2022-12-165] [REFERRED TO]
HEMANT B. PRASAD AND ANOTHER VS. PERFECT SOLUTIONS, REP. BY ITS PROP. SRI. PRAFUL S. SHAH, HYDERABAD [LAWS(APH)-2018-6-75] [REFERRED TO]
N.K. DEVELOPERS PVT. LTD. VS. CONCORD INDIA LTD. [LAWS(KAR)-2017-10-216] [REFERRED TO]
Monnet Ispat and Energy Limited VS. Orissa Manganese and Mineral [LAWS(ORI)-2012-9-23] [REFERRED TO]
YASHWITHA CONSTRUCTIONS P LTD VS. SIMPLEX CONCRETE PILES INDIA LTD [LAWS(APH)-2008-5-2] [REFERRED TO]
SIMPARK INFRASTRUCTURE PVT.LTD VS. JAIPUR MUNICIPAL CORPORATION [LAWS(RAJ)-2012-9-111] [REFERRED TO]
S.K. ENTERPRISES VS. RAJASTHAN STATE SEEDS CORPORATION LTD. & ANR. [LAWS(RAJ)-2013-9-364] [REFERRED TO]
DSC VENTURES PVT. LTD. VS. MINISTRY OF ROAD TRANSPORT AND HIGHWAYS [LAWS(DLH)-2020-6-73] [REFERRED TO]
SH SURENDER PAL SINGH VS. HINDUSTAN PETROLEUM CORPORATION LTD [LAWS(DLH)-2009-7-264] [REFERRED TO]
BHUPENDER LAL GHAI VS. CROWN BUILDTECH PRIVATE LIMITED [LAWS(DLH)-2011-7-316] [REFERRED TO]
G K TRADERS SOLE PROPRIETORSHIP VS. U.P. POWER CORPORATION LTD. [LAWS(ALL)-2014-9-39] [REFERRED TO]
SATYA PRAKASH SINGH VS. DINESH PRAKASH SINGH [LAWS(ALL)-2014-11-114] [REFERRED TO]
LEELAJAY TECHNOLOGIES PVT LTD VS. BHIMRAO AMBEDKAR UNIVERSITY [LAWS(ALL)-2011-9-56] [REFERRED TO]
SULPHUR MILLS LIMITED VS. DAYAL FERTILIZERS PVT LIMITED [LAWS(MAD)-2020-11-170] [REFERRED TO]
INDIAN OIL CORPORATION VS. RELIANCE INDUSTRIES LIMITED [LAWS(TLNG)-2022-10-80] [REFERRED TO]


JUDGEMENT

A.R.Lakshmanan, J. - (1.)LEAVE granted.
(2.)THE appellant - National Highways Authority of India has filed the present appeal against the judgment and order of the High Court of Orissa at Cuttack dated 06.01.2006 in Arbitration Petition No. 23 of 2005 whereby the High Court in modification of its order dated 01.07.2005 substituted Mr. Justice P. Chenna Keshav Reddy, former Chief Justice of Andhra Pradesh and Gauhati High Court as the Presiding Arbitrator in place of Mr. Justice Y. Bhaskar Rao.
The appellant - National Highways Authority of India (in short "the NHAI") issued letter of acceptance to respondent No.1, Bumihiway DDB Limited (JV), New Delhi for award of the contract for widening to 4/6 lanes and strengthening of existing 2-Lane carriage of National Highway-5 from Km 233.000 to Km 284.000 between Ichapuram to Ganjam in the State of Orissa, which was a part of the Chennai-Kolkata Corridor of the Golden Quadrilateral connecting Delhi, Mumbai, Chennai and Kolkata.

On 11.06.2001, the appellants entered into an agreement with respondent No.1 for the aforesaid contract. The contract agreement contained a mechanism for resolution of disputes between the parties as contained in Sub-Clause 67.3 Sub-Clause 67.3 reads as follows:

"Any dispute in respect of which the Recommendation(s), if any, of the Board has not become final and binding pursuant to Sub-Clause 67.1 shall be finally settled by arbitration as set forth below. The arbitral tribunal shall have full power to open-up, review and revise any decision, opinion, instruction, determination, certificate or valuation of the Engineer and any Recommendation(s) of the Board related to the dispute. (i) A dispute with an Indian Contractor shall be finally settled by arbitration in accordance with the Arbitration and Conciliation Act, 1996, or any statutory amendment thereof. The arbitral tribunal shall consist of 3 arbitrators, one each to be appointed by the Employer and the Contractor. The third Arbitrator shall be chosen by the two Arbitrators so appointed by the Parties and shall act as Presiding arbitrator. In case of failure of the two arbitrators, appointed by the parties to reach upon a consensus within a period of 30 days from the appointment of the arbitrator appointed subsequently, the Presiding arbitrator shall be appointed by the President, Indian Roads Congress. For the purposes of this Sub-Clause, the term "Indian Contractor" means a contractor who is registered in India and is a juridic person created under Indian law as well as a joint venture between such a contractor and a Foreign Contractor. (ii) If one of the parties fail to appoint its arbitrator in pursuance of sub-clause (i) and (iii) above, within 30 days after receipt of the notice of the appointment of its arbitrator by the other party, then the President of Indian Road Congress both in cases of foreign contractors as well as Indian Contractors, shall appoint the arbitrator. A certified copy of the order of the President of Indian Road Congress making such an appointment shall be furnished to each of the parties. (iv) Arbitration proceedings shall be held at Delhi in India, and the language of the arbitration proceedings and that of all documents and communications between the parties shall be English. (v) The decision of the majority of arbitrators shall be final and binding upon both parties. The cost and expenses of Arbitration proceedings will be paid as determined by the arbitral tribunal. However, the expenses incurred by each party in connection with the preparation, presentation, etc. of its proceedings as also the fees and expenses paid to the arbitrator appointed by such party or on its behalf shall be borne by each party itself."

(3.)DURING the pendency of the contract period, the appellant noticed some defaults on the part of respondent No.1 who had neglected the execution of the contract due to which the project of national interest had been delayed by more than 5 years. Thus action in terms of clause 63.1(d) of the conditions of contract was taken by the appellants and respondent No.1 was evicted from the site on 14.01.2004. The contractor, respondent No.1, initiated proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 and filed Arbitration Application No. 2 of 2004 in the Court of District Judge, Ganjam who, vide order dated 02.04.2004, restrained the appellants from expelling respondent No.1 from the work site till dispute between the parties are adjudicated as per the contract agreement. The Court further refused to pass any orders restraining the appellants from encashing the Bank Guarantees.
The said order was challenged by both the parties before the High Court of Orissa. The High Court, vide common order dated 02.11.2004, disposed off both the appeals directing appellant No.1 to constitute Dispute Review Board within a period of 6 weeks. The order of restraint passed by the District Judge was set aside and liberty was granted to appellant No.1 to go for re-tendering process with liberty to respondent No.1 to participate. The aforesaid order was again challenged by both the parties by filing separate special leave petitions, namely: a) SLP (C) No. 24813-24814 of 2004 b) SLP (C) No. 25890-25891 of 2004



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