M/S Jas Toll Road Company Ltd. vs National Highway Authority Of ... 2023 Latest Caselaw 1459 Del

Delhi High Court M/S Jas Toll Road Company Ltd. vs National Highway Authority Of ... on 31 July, 2023 $~ * 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Signed By:HARIOM Signing Date:02.08.2023 14:11:37 to JTR in all 12 claims except Claims 7 and 9, of which Claim 7 was withdrawn by JTR.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. [email protected]/-). 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