STATE OF RAJASTHAN Vs. MADHAV INFRA PROJECT LIMITED

JUDGEMENT

(1.) Under challenge is the judgment dated 17-8-2017 passed by the Commercial Court (Additional District Judge No.1, Jaipur Metropolitan City, Jaipur) dismissing objection No.45/2016 under Sec. 34 of the Arbitration and Conciliation Act, 1996 (hereafter 'the Act of 1996') by the appellate State against the Arbitral Tribunal's award dated 8-8-2015.

(2.) The facts of the case that the appellant State (hereafter 'State') floated a Notice Inviting Tender (NIT) in Aug., 1997 for construction of the Bharatpur-Mathura bye-pass road of 10.850 km. length (9.6 km new and 1.25 km improvement) on Build, Operate and Transfer (BOT) basis. The respondent claimant's (hereafter 'claimant') tender for Rs.1325 lacs was accepted on 25-7-1998. The road in issue was to be constructed in two phases i.e. Phase-I and Phase-II. An approximate cost for Phase-I was estimated at Rs.1045.23 lacs and Rs.354.75 lacs for Phase-II, which was to be commenced after completion of Phase-I. The concession period agreed was 111 months, from the date of handing over the site of which the road was to be constructed within 24 months and the successful bidder thereafter authorized to collect toll at the State Government's notified rates till 6-4-2008. An agreement for the purpose was executed on 19-8-1998.

(3.) Construction under phase-I was completed on 10-4-2000 and as per the agreement in issue the claimant company commenced collection of toll. However soon thereafter, the State, following local agitation to assuage which the Chief Minister announced restrain on collection of toll on the Bharatpur-Deeg section (1.25 km stretch) of the Bharatpur byepass, prevented the claimant from so doing. This albeit the Bharatpur-Deeg section of 1.25 km was incontestably an integral part of the project facility (toll road) as obtained in the agreement dated 19-8-1998 and over which the claimant had a right to collect toll from vehicles using any part it. The claimant in the circumstances invoked the arbitration clause under the agreement between it and the State of Rajasthan claiming loss of Rs.453.69 lacs for reason of prevention from collection of toll and Rs.292.17 for the State's purported delay in publishing the notification for restraining traffic entering into Bharatpur City for reason of which such traffic was not diverted and did not use the newly constructed project facility i.e. toll road.