CHAUHAN, J. - (1.) THIS appeal arises out of order dated 17. 1. 2006 passed by the District Judge, Jaipur City, Jaipur, whereby the objections raised by the respondents under Section 34 of the Arbitration and Conciliation Act, 1996 (`the Act', for short) has been allowed and the award dated 1. 12. 2003, passed in favour of the appellant, by the learned Arbitral Tribunal has been set aside.
(2.) THE brief facts of the case are that by 1997, in Bhartpur the road going from Bhartpur to Mathura passed through a highly congested area of the city. THErefore, the Public Works Department (henceforth to be referred as the respondents) were satisfied that a Bharatpur Bye-pass (`the project', for short) needs to be constructed. According to respondents, the project would consist of the Bye-pass from Bharatpur to Mathura (Km. 4/553) to Bharatpur-Jaipur Road, National Highway 11 (Km 59/800 ). THE length of the Bye-pass would be 10. 850 Kms. THE project would also include the Bharatpur Deeg Road. THE Bharatpur-Deeg Road covered only 1. 25 Kms of the total project of 10. 850 Kms. (This is essential to spell out at this juncture as one of the two controversies in this case revolves around the Bharatpur-Deeg segment of the project ). Since due to financial constraint, the respondents were unable to construct the said project on their own, they invited tenders for the project. The project was to be done on the basis of Build, Operate and Transfer (`bot', for short ). In response thereto, the appellant filed their tender on 26. 9. 1997 and quoted the cost of the project as Rs. 1,325 lacs with a total concession period as 111 months (9 years and 3 months), i. e. from 7. 1. 1999 to 6. 4. 2008, from the date of handing over the land till the handing over the facility to the respondents. However, prior to the finalization of the bid, on 4. 9. 1997, a Pre-Bid Conference took place where the respondents gave clarifications sought by the various bidders, including the levy and collection of toll on the Bharatpur-Deeg Section of the Bye-pass. Since the Bharatpur- Deeg Section of the Bye-pass was a short one, as pointed out above, doubts were raised whether the bidders will be allowed to levy and collect toll on this Section or not. During the Conference, the respondents agreed that toll would be levied and collected for this Section as well. It was also clarified by the respondents that in breach of contract, the amount of compensation would have to be worked out keeping in view the investments made by the entrepreneur. On 5. 2. 1998, the financial bid was opened; on 25. 7. 1998 the respondents sent the letter of acceptance to the appellant. The appellant was called upon to furnish performance security deposit, which they did. Thereafter, on 19. 8. 1998, the appellant and the respondent entered into a Concession Agreement-agreement for authorizing collection fee (Toll) by the concessionaire. According to the said agreement, the appellant was to recover the investment through levy of fees toll on all the users on the basis of fix tariff rate as prescribed by the Government published in the official gazette. The land was handed over by the respondents to the appellant on 7. 1. 1999. Therefore, the total concession period including the construction was from 7. 1. 1999 to 6. 4. 2008. However, the appellant completed the project on 10. 4. 2000 itself. The said Bharatpur Bye-pass constructed by the appellant, was inaugurated on 12. 4. 2000. However, while inaugurating the sad project, the then Chief Minister announced that no toll would be levied on vehicle plying over the Bharatpur-Deeg Section of the Bye-pass. Since the respondents had represented to the appellant that they would be permitted to levy toll on all the vehicles utilizing the Bharatpur-Deeg Section of the Bye-pass, the announcement by the then Chief Minister took the appellant by surprise. Immediately, the appellant wrote to the respondents about the exorbitant loss that they would suffer if the announcement with regard to the Bharatpur-Deeg Section were implemented. Considering the loss that the appellant would suffer, the Government permitted the appellant to collect the toll on the said Section from 28. 4. 2000. However, due to severe agitation by the public, due to local pressures, the Collector, Bharatpur restrained the appellant from collecting the toll from the vehicles plying on the Bharatpur-Deeg Section from 13. 5. 2000. Since the appellant was suffering huge losses, a meeting was held in the Chamber of the PWD Secretary wherein a decision was taken that a joint survey would be made in order to assess the extent of loss suffered by the appellant. Consequently, a joint survey of the traffic passing through the Bharatpur-Deeg Segment was carried on by the Executive Engineer, PWD, the Sub-Divisional Magistrate, Bharatpur and the appellant from 3. 7. 2001 to 10. 7. 2001 (henceforth to be referred to as `the 2001 Survey', for short); the losses incurred by the appellant came to be assessed and quantified on the basis of the said Survey. The bar on collection of toll from the Bharatpur-Deeg Section was one of the disputes, which erupted between the appellant and the respondents. Another grievance that arose from the appellant's side related to the fact that the toll collection depended on the quantity of traffic passing through the Bharatpur Bye-pass. In case the traffic was not prohibited to pass through Bharatpur, the vehicles would continue to use the old route through Bhartpur and would thereby avoid using the Bharatpur Bye-pass. Hence, such traffic would avoid paying the toll. Thus, according to the appellant, the Government was duty bound to issue such notification as would restrict the traffic passing through the Bharatpur town, which was avoiding the payment of the toll. Despite the various representations made by the appellant to the respondents for preventing the traffic from circumventing the Bye-pass, the Government failed to issue the notification within a reasonable time; although the Bye-pass was inaugurated on 12. 4. 2000, the notification was not issued till 1. 9. 2000 and was not made applicable till 1. 10. 2000. Thus, the appellant continued to suffer losses on this account also.
(3.) THEREFORE, vide letter dated 11. 10. 2001, the appellant invoked the Arbitration clause and prayed for appointment of an Arbitral Tribunal in accordance with Clause 18 of the Bid Document. According to Clause 18, an Arbitral Tribunal of three Arbitrator was to be appointed; one by the entrepreneur, one by the Government and third through mutual consent of both the Arbitrators so appointed by the parties. The appellant appointed Mr. A. P. Dalvi as the Arbitrator from their side and requested the respondents to appoint an Arbitrator from their side. However, the respondents did not pay any heed to the appellant's request. Hence, the appellant filed an arbitration application before this court. Vide order dated 12. 4. 2002, this Court appointed one Mr. N. P. Mathur as the Arbitrator. Subsequently, Mr. Dalvi and Mr. Mathur appointed Mr. S. M. Duggar as the third Arbitrator. Hence, the Arbitral Tribunal of three Arbitrators was duly constituted. On 23. 9. 2002, the appellant filed their statement of claim; on 7. 12. 2002, the respondents filed their reply; on 21. 12. 2002, the appellant filed their rejoinder. Considering the pleadings of the parties, the learned Tribunal framed the following issues: 1. (a) Whether the claimant, as per agreement is entitled to collect toll on for restriction of traffic through the town, which has effected the toll tax or not? If so, how much delay and delay in full rate of safe implementation as on date, or not? (b) By virtue of it, is the claimant entitled to recover its claim of Rs. 292. 17 lacs up to 31. 12. 2002 and thereafter or not? Or merely by concession period as averred by the Respondents-State? 3. As a consequence of issue Nos. 1 & 2 which party breached the contract? Whether claimant or Respondent-State? 4. Whether the claimant is entitled to claim interest on its due claim amount as per decision of issue 1 & 2? If so, from what date and at what rate of simple/compound interest? 5. Whether the claimant or Respondent-State is entitled for cost of Arbitration incurred and claimed by each party? If so, at what amount and to which party? 6. Any other if any demanded by any party during proceedings. After considering the entire evidence, the learned Tribunal adjudicated each and every issue extensively and after giving findings on all issues, passed a detailed speaking Award in favour of the appellant on 1. 12. 2003. The Arbitral Tribunal directed the respondents as under:- (i) Pay a sum of Rs. 990. 52 Lacs (Rupees Nine Hundred Ninety, and Fifty-two Lacs only) towards actual loss under issue No. 1 and above, due up to 31. 12. 2003 under this award. (ii) The respondent must also pay 18% simple interest on amount of Rs. 990. 52 Lacs to the claimant from 31. 12. 2002 up till it is actually paid to the claimant. (iii) Relief 1 and 2 above are consequential effects of breach of contract by Respondent up to 31. 12. 2003 only. In order to plug such breach in totality so as to avoid its re-occurrences thereafter following directives to the Respondent are further awarded: (a) As per agreement Claimant must be allowed to re-start toll collection on Bharatpur-Deeg Section of Bye-pass from 1. 1. 2004 so that performance of contract by both parties in right sanctity, is resorted. (b) The respondent must issue appropriate order in this regard to restore the rights of the claimant for toll collection on Bharatpur-Deeg Section of the bypass. (c) A police chowki be established near the tollbooth on Bharatpur-Deeg Section of the Bye-pass to prevent any untowardly incidents as had occurred in the past and total cost in this regard shall be met with the claimant. The duration of this Police chowki is to be decided by both parties to the contract for maintaining law and order and smooth collection of toll by the claimant. (d) The Tribunal directs respondent to permit claimant for relocation of tollbooth on existing highway i. e. on Jaipur- Bharatpur Road NH-11 and Mathura-Bharatpur Road just before the start of the by-pass. It further directs respondent that Police Chowkies shall be established at both the ends of the Bye-pass, the cost of which will be borne by the claimant for such period as both parties may feel its necessary. In case, somehow the relocation of the tollbooth on existing highways, i. e. Jaipur-Bharatpur Road NH-11 and Mathura- Bharatpur Road SH No. 14 just before the start of the Bye-pass is not implemented, then respondent shall have to reimburse quarterly the claimant's loss in the toll revenue as calculated in Table T-5 up to the end of concession period. This reimbursement shall have to be made timely at the end of each quarter on the first day of the next quarter otherwise for delay additional liability of 18% p. a. simple interest will have to be paid by the respondent for such delay. (e) In case the respondent (the State Govt.) somehow cannot implement (a), (b) and (c) referred above, then it shall have to reimburse quarterly, the claimant's loss in the toll revenue as calculated in the Annexure-Table T-3 up to end of concession period. This reimbursement shall have to be made timely at the end of each quarter on the 1st day of the next quarter otherwise for any delay additional liability of @ 18% p. a. simple interest will be on the respondent for such delayed period. (iv) Both the parties must meet their own cost of arbitration. No further relief of any kind has been awarded by the Tribunal to any party. ;