TMI Blog2020 (11) TMI 1092X X X X Extracts X X X X X X X X Extracts X X X X ..... may explore all the possibilities to arrive at a reasoned conclusion as to whether the number of vehicles passing through these toll plazas are correct or not as different figures are being claimed by the contesting parties. The said exercise is also necessary to decide two contempt petitions filed by both the parties against each other, which are pending adjudication before this Court. In case the system of actual collection of toll tax to be deposited by MEP with SDMC after adjustment of administrative and toll collection expenses continues for some time, the SMCD will be at liberty to get the said toll plazas inspected by its inspectors/staff on regular basis and/or by continuously monitoring the said toll plazas by installing the CCTV system or any other appropriate gadgets to enable it to count the actual number of vehicles passing through toll gates and paying the toll, so as to avoid continuous bickering between the two parties on this issue and the court being unable to continuously monitor implementation of directions to deposit the amount so collected by MEP in the bank accounts of SDMC after deducting the administrative and toll collection expenses @ 7.5%. It is mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al facts on record, amendment of writ petition and for extension of effective date of termination of the contract and for hearing W.P.C. No. 2241/2020 and W.P.C. No.370/2020 together as well as an application moved by South Delhi Municipal Corporation (hereinafter referred to as SDMC ) seeking dismissal of the writ petition. However, no order was passed in C.M.No.11397/2020 filed by SDMC for dismissal of the writ petition and the same was adjourned till the next date. 3. The writ petition No.2241/2020 was filed mainly challenging an order dated 31.01.2020 passed by Commissioner of SDMC and a subsequent notice of termination of the contract dated 14.02.2020 served upon MEP. During the pendency of the writ petition, an amendment application was moved and said application was allowed by learned Single Judge. Now the writ petition No.2241/2020 has enlarged reliefs as under: a. Issue of a writ of mandamus or any other appropriate writ and appoint an independent Adjudicator to adjudicate the claims of the petitioner. b. Issue a declaratory writ to the effect that clause 16 of the agreement which provides for adjudication mechanism has been left unworkable on account of actions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... During the pendency of this writ petition, pass ad interim order direction the respondent to keep in abeyance the Termination Notice dated 16.03.2020 and subsequent extension of termination date as well as NIT dated 27.04.2020 for fresh bidding for collection of tax, till the final disposal of the instant writ petition; m. Direct that the money appropriated by the Respondent by way of encashment of bank guarantee for Rs.64 crore, will be held by the respondent as a security deposit after adjusting therefrom the amount payable by the petitioner towards ECC; n. Pass such other order/orders as this hon ble court may deem fit and proper in the facts and circumstances of this case. 4. If we go little back in history, the SDMC had issued an NIT and had called for tenders for collection of the entry tax/toll tax in Delhi in the year 2017 and the contract was awarded to MEP and since then MEP is managing about 124 Toll Plazas, which have been established on all the roads through which one can enter the National Capital Territory of Delhi. It is pertinent to mention here that apart from collection of the toll, MEP is also authorized to collect ECC i.e. Environment Compensation Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... weekly amount payable by the petitioner to the SDMC towards toll tax; d. Issue a writ in the nature of mandamus directing the respondents to take into consideration the change in circumstances make suitable downward revision in the weekly/ annual remittance commensurate with the reduction in toll tax paying commercial vehicles and taking into account the tax leakages on account of free lanes; e. Issue a writ in the nature of certiorari quashing the demand notice dated 18.11.2019 issued by the respondent to the petitioner for payment of Rs.450.6973 crores. f. Issue a writ in the nature of certiorari quashing the demand of .1 % per day that is 36.5% per annum in the demand letter dated 18/11/2019 as being in terrorem and inequitable. g. Issue a writ in the nature of Mandamus directing the SDMC to provide a suitable mechanism for resolution of disputes/grievances of the petitioner as the mechanism provided by the contract has become unworkable. 2. The case of the petitioner is that for the purpose of collecting Toll Tax, SDMC floated a tender on 21.07.2017 inviting bids from interested parties to collect Toll Tax and ECC from specified commercial vehicles at 124 toll p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... post-dated cheques. 7. Learned senior counsel for the petitioner has vehemently urged as follows: (i) He has urged that as is apparent from the minutes of the meeting noted above, there has been a reduction of at least 30% in the traffic on the opening of the Eastern peripheral Expressway. This has further reduced on the opening of the Western Peripheral Expressway. Hence, he submits that the petitioner cannot be made to pay toll tax which they have not been collecting and will not be able to collect given the volume of traffic that is passing through various toll booths. (ii) It is further pleaded that on 04.06.2018, a direction was issued by the respondent not to collect toll tax and ECC from other than the allotted six lanes. It is stated that this itself is causing a loss of Rs.36.81 lakhs per day. (iii) It is further pleaded that Clause 16 of the agreement between the parties stipulates a dispute resolution clause. Under the said clause, in case any disputes are stated, decision has to be given by a competent officer in connection with or arising out of the agreement. If the competent officer fails to give his instructions or decision in writing or if the contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16.3 If the Competent Officer fails to give his instructions or decision in writing within the aforesaid period or if the Contractor is dissatisfied with the instructions or decision of the Competent Officer, the Contractor may, within (15) days of receipt of Competent Officer's instruction or decision, appeal to the Commissioner, SDMC who shall afford an opportunity to the Contractor to be heard, if the later so desires, and to offer evidence in support of its appeal. The Commissioner, SDMC shall give his decision in writing within (30) days of receipt of Contractor's appeal which shall be acceptable to the Contractor. 11. It is manifest from the above that a procedure has been incorporated in the Agreement whereby in case any contractor, namely, the petitioner has any dispute or any grievance, he can approach a competent officer/the Commissioner, SDMC who has to after giving a hearing pass a reasoned order. 12. In my opinion, it would be in the interest of justice that before the W.P. (C) 12483/2019 Page 7 of 10 respondent enforces their demand as now claimed by demand dated 18.11.2019, first they should give a hearing to the petitioner and thereafter taking in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stant ease, there has been a noncompliance with such implied requirement of the audi alteram partem rule of natural justice at the pre-decisional stage. The impugned order therefore, could be struck down as invalid on that score alone. But we refrain from doing so, because the learned SolicitorGeneral in all fairness, has both orally and in his written submissions dated August 28, 1979, committed himself to the position that under Section 18-F, the Central Government in exercise of its curial functions, is bound to give the affected owner of the undertaking taken-over, a full and effective hearing on all aspects touching the validity and/or correctness of the order and/or action/of takeover , within a reasonable time after the takeover. The learned Solicitor-General has assured the court that such a hearing will be afforded to the appellant Company if it approaches the Central Government for cancellation of the impugned order. It is pointed out that this was the conceded position in the High Court that the aggrieved owner of the undertaking had a right to such a hearing. 14. Given the terms of the contract as noted above i.e. Clause 16 and the legal position regarding complian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20 passed by Commissioner of SDMC and the demand notice dated 14.02.2020 were challenged. While hearing the interim prayers of the MEP, i.e., the petitioner, the learned Single Judge was pleased to pass an order dated 02.03.2020, which is reproduced hereunder: W.P.(C) 2241/2020 CM APPL. No.7822/2020 1. Issue notice. Learned counsel for respondent accepts notice. 2. This Writ Petition is filed seeking to impugn the speaking order passed dated 31.1.2020 and Demand Notice dated 14.2.2020 issued pursuant to a hearing given as directed by this court in its order dated 26.11.2019. 3. Learned senior counsel for the petitioner has raised various submissions to plead as to why the impugned order has been wrongly passed. He further submits that the connected matter being W.P.(C)570/2020 is coming up on 6.3.2020. 4. Learned senior counsel appearing for the respondent has pointed out that there has not been proper compliance of the order of this court dated 26.11.2019 inasmuch as the petitioners have defaulted in making payment of (a) Rs.20 crores per week as stated by this court; (b) have not given fresh Post-Dated Cheques as was directed by this court. 5. Counter-Af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicta of the Supreme Court in Energy Watchdog (supra) regarding force majeure has been summarized as under: .. 56. It is under this factual backdrop that the ground of Force Majeure taken in March, 2020 would have to be adjudged. The grounds taken to invoke the Force Majeure clause are that due to outbreak of COVID-19 experts from France who may be required cannot travel to India. Since the Force Majeure clause in the contract covers epidemics and pandemics, the Contractor claims that its non-performance is justified and the invocation of Bank Guarantees is liable to be stayed. There is no doubt that COVID-19 is a Force Majeure event. But was this event the cause of the nonperformance? 57. The law relating to Force Majeure has been recently settled by the Supreme Court in the case of Energy Watchdog v. Central Electricity Regulatory Commission, (2017) 14 SCC 80. The principles laid down by the Supreme Court in paragraphs 34-42 are as under: a) Force Majeure would operate as part of a contract as a contingency under section 32 of the Indian Contract Act 1872 (`ICA‟). b) Independent of the contract sometimes, the doctrine of frustration could be invoked by a part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the steps that were to be taken, the various compliances that were required to be made and only then assess as to whether, genuinely, a party was prevented or is able to justify its nonperformance due to the epidemic/pandemic. 63. It is the settled position in law that a Force Majeure clause is to be interpreted narrowly and not broadly. Parties ought to be compelled to adhere to contractual terms and conditions and excusing nonperformance would be only in exceptional situations. As observed in Energy Watchdog (supra) it is not in the domain of Courts to absolve parties from performing their part of the contract. It is also not the duty of Courts to provide a shelter for justifying nonperformance. There has to be a real reason‟ and a real justification‟ which the Court would consider in order to invoke a Force Majeure clause 25. What is clear from the aforesaid is that in terms of the 2nd March order i) Rs.20 crores were payable per week, ii) the arrears of Rs.115.04 crores were payable in three equal monthly instalments, the first instalment was to be paid in a fortnight i.e. on 17.03.2020 and iii) the petitioner was to issue fresh post-dated cheques in term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poration itself referred to Circular dated 19.02.2020 issued by the Ministry of Road Transport Highways (MORTH) which notified that the COVID-19 pandemic was a force majeure occurrence. In effect, the force majeure clause under the agreement immediately becomes applicable and the notice for the same would not be necessary. That being the position, a strict timeline under the agreement would be put in abeyance as the ground realities had substantially altered and performance of the contract would not be feasible till restoration of the pre force majeure conditions. (ii) A Full Bench of this Court by order dated 25.03.2020 has ordered that interim orders obtaining as on 16.03.2020 would continue till 15.05.2020, which has subsequently been extended. In the interim, on 16.03.2020 the respondent cancelled the agreement with the petitioner, on grounds of what it perceived as a clear breach of the orders of this Court dated 02.03.2020. 28. De hors the merits of the Corporation s contentions or justification, its impugned order dated 16.3.2020 was premature at least by one day. It could not have been passed till midnight of 16th March. Furthermore, the due amounts of Rs.78 crores as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record and amendment applications are allowed. Amended petition be filed within two weeks from today, to which reply and rejoinder be filed in four successive weeks each. CM No. 11092/2020 is not on record. The Registry is directed now to show the same in the cause list. The respondent s application being CM No. 11397/2020 for dismissal of the writ petition is held over with till the next date. CM 11095/2020 and CM 11096/2020 stand disposed-off . 7. The MEP also filed a review petition No. 107/2020, which was disposed of on 24.06.2020 by learned Single Judge and relevant portion of the said order is reproduced hereunder: REVIEW PET. 107/2020 5. The hearing was conducted through video conferencing. 6. This Review Petition seeks modification of the order dated 12.06.2020 on the ground that there are two errors: (i) that once force majeure has been made applicable by the court from 19.02.2020, then the Rs.20 crores weekly payment by the petitioner would stand suspended and as a corollary, the outstanding amount of Rs.115.04 crores, as recorded in this Court s order dated 02.03.2020, would be reduced by roughly Rs.38 crores (i.e. amount computed for 19th February to 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected by force majeure disability, it could have brought the same to the notice of the court or expressed its inability to pay the same. The acknowledged dues of Rs.115.04 could have been a subject matter of review on 2.3.2020 only if the petitioner had averred or shown that motor vehicular traffic between 19th February and 2nd March had already been affected on date. Surely the petitioner would have known of the ground reality/toll collections/traffic volume, between 19.2.20 and 2.3.20. Therefore, for the petitioner to now submit that the force majeure had affected its toll collection before 2nd March, is untenable. The order of 12.6.2020 is clear apropos the amount due before 2nd March and the recurring weekly dues thereafter. It does not call for any review or modification. 8.The Court finds no merit in the review petition. It is, accordingly, dismissed. 9. The order be uploaded on the website forthwith. Copy of the order be also forwarded to the counsels through email. 8. In the meantime, SDMC and others have challenged the order dated 12.06.2020 by filing LPA No. 165/2020 praying for setting aside the order dated 12.06.2020 and allowing C.M.No.11397/2020 seeking dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Every breach or nonperformance cannot be justified or excused merely on the invocation of COVID-19 as a Force Majeure condition. The Court would have to assess the conduct of the parties prior to the outbreak. (3) PAST CONDUCT OF MEP PRIOR TO THE OUTBREAK OF COVID-19: It has been the case of SDMC that even before the first lockdown took place from 25.03.2020, MEP was in default of toll tax dues of Rs.840.17 crores as per Agreement. The breach or nonperformance by MEP since October, 2017 cannot be justified or excused merely by invocation of COVID-19 as a Force Majeure event. The termination notice dated 16.03.2020 was issued by SDMC considering the past conduct of the MEP and repeated violation of terms and conditions of contract agreement dated 28.09.2017 by MEP. The said company has neither paid Rs.24.29 crores per week as per contract nor paid Rs.20.00 crores per week in compliance of the Court orders dated 26.11.2019 and 02.03.2020. It has also violated other conditions imposed by Courts. (4) NHAI FOUND MEP ILLEGALLY COLLECTING ENTRY TAX FROM FREE LANES: As per SDMC, MEP has been misrepresenting that SDMC has restricted it to six lanes at NH8 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctual collection, SDMC would not be entitled to claim any further amount in case the Contractor s collection increases. Also, in the same vein, SDMC would not compensate the Contractor in case its collection decreases due to any reason whatsoever. MEP thus acknowledged that it will not seeks reduction in Contract Fee due to any reason whatsoever. Clause 3 (e) of the contract is as under: The Contractor agrees and confirms that it shall not be entitled to any compensation rebate or reduction in Toll Collection Contract Fee on account of change or variation in traffic pattern, volume or intensity for any reason whatsoever other than as specifically permitted in accordance with this Agreement. (6) MEP IS DIRECTLY COLLECTING MORE THAN 50% OF TOTAL TOLL TAX REVENUE WHICH IT IS NOT DEPSITING. SDMC IS GETTING LESS THAN 50% AND NOT 85% As per SDMC, the MEP has been making false statements that since 23.03.2020 SDMC is getting more than 85% of toll tax amount directly from the RFID system installed at 13 entry points which have a total traffic volume of around 85%. This is absolutely wrong and misleading statement. 85% Traffic Volume does not mean 85% revenue. A study of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoked only if there was a default of the contractual amount and not to prevent a default. It is also submitted that MEP has itself admitted in its letter dated 19.03.2020 that it has not complied with order dated 02.03.2020. MEP admits in para 6 of the letter that the first compliance of order dated 02.03.2020 was to be made on 09.03.2020 and it was not able to pay. It seeks application of Force Majeure on operation of order dated 02.03.2020. It is relevant to state that the letter does not even mention O.M. dated 19.02.2020 issued by Ministry of Finance, Government of India. (10) MEP IS NEITHER GIVING TRAFFIC DATA NOR DEPOSTING TOLL AMOUNT RECEIVED: As per SDMC, MEP has deliberately not given data of Average Weekly Traffic Count since 01.11.2019 even though the same is specifically required under Clause 8.7 of the agreement. In fact, since 23.03.2020, MEP has not deposited any amount directly with SDMC, which is in gross violation of High Court orders dated 20.04.2020 and 12.06.2020. (11) FORCE MAJEURE RELIEF TO BE GOVERNED BY MORT H LETTER DATED 18.05.2020, NOT O.M. DATED 19.02.2020: Further case of SDMC is that Ld. Single Judge has erred in holdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court dated 20.04.2020, which order is still valid and subsisting. (14) STATUTORY PUBLIC FUNDS BEING ILLEGALLY SIPHONED OFF BY MEP: As per SDMC, toll tax is a major source of revenue for the Municipal Corporation. While MEP has misappropriated thousands of crores of public funds, SDMC is facing a major financial crisis and is unable to fulfil its municipal duties or even pay salaries of its employees. The impugned order makes a serious mistake in giving a carte blanche to MEP and permit them to escape from their liability to pay even as per the Court order. Since the beginning of the contract, MEP has been playing tactics to delay and avoid paying its contractual dues. It has been further submitted that in view of the above, all applications filed by MEP were liable to be dismissed including the application for modification of the order dated 02.03.2020. In fact, the petition itself ought to be dismissed in view of the subsequent events as held in Shipping Corporation India Ltd. vs. Machado Brothers Ors. (2004) 11 SCC 168. The impugned order based on such a misconstrued and misconceived presuppositions has resulted in a grave miscarriage of justice and unless it is se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 9. Shipping Corporation of India Ltd. Vs. Machado Brothers Ors. (2004) 11 SCC 168 : Continuation of a suit after disappearance of the cause of action would amount to an abuse of process of the court. 10. State of Kerala Ors. Vs. M.K. Jose (2015) 9 SCC 433 : Where alternative and equally efficacious remedy is available, the litigant should pursue that remedy instead of filing a writ petition. We have gone through all the above-mentioned judgments thoroughly and have taken into consideration the law laid down in these judgments while deciding these appeals. SUBMISSIONS ON BEHALF OF MEP: 11. Mr. Mukul Rohatgi, Senior Advocate and Mr. Abhishek Manu Singhvi, Senior Advocate with Mr. Rajiv S. Dwivedi and Mr. Azeem Samuel, Advocates have submitted on behalf of MEP as under: A. THE FORCE MAJEURE (FM) CLAUSE COMES INTO OPERATION FROM 19.02.2020 EVEN THOUGH NOTICE INVOKING FM CLAUSE IS DATED 19.03.2020: A1. The FM Clause 15 of the contract is very clear. It provides for reduction of weekly instalments if any circumstance causes a material adverse impact . It is settled law that an FM clause by its very nature tends to override all other provisions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the ground reality having being altered because of global pandemic/nationwide lockdown or reduction of volume of traffic, as a consequence thereof. Therefore, the said amounts ought to be paid as directed , B3. The chart below shows that as on 19.02.2020, MEP was only in default of Rs.15.00 Cr. in respect of the directions contained in order dated 26.11.2019: Amount payable between 26.11.2019 to 17.02.2020 as per order dated 26.11.2020 (12 weeks x 20 cr/week) 240.00 Cr. Amount paid between 26.11.2019 to 17.02.2020 161.55 Cr Balance amount 79.00 Cr. Amount of BG encashed by SDMC 64.00 Cr. Balance payable 15.00 Cr. B4. This amount of Rs.15.00 Cr. has already been paid by MEP. C. WHETHER MEP HAS BEEN AN HABITUAL DEFAULTER WHO HAS REFUSED TO PAY DUES TO SDMC? C1. THIS IS ABSOLUTELY INCORRECT. In respect of the same it has been submitted that MEP had bid to give Rs.23.12 Cr./week in the absence of any FM circumstances exerting downward pressure on the said figur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y with respect to the issue of free lanes, since 17th October, 2017 MEP has been writing letters to SDMC on the issue of facing problem in collecting tolls from specified vehicles as per Toll Tax Bye Laws dated 31st October, 2007. If MEP allows vehicles to run free, how are they supposed to meet the revenue collecting target? SDMC has so far refused to give a concrete answer in respect of the same in any forum. C6. MEP points out that it is also argued by SDMC that there is an option to surrender the contract if MEP does not find it viable. This argument has no legal basis. Surrender of contract is an additional elective right given to MEP, it is under no obligation to choose. Also, it is important to note that MEP has so far before the COVID pandemic paid an average amount of Rs.19 Cr./week to SDMC as against the Rs.15.00 odd crores it will get from the new contractor. Why SDMC officials are keen to given contract to a contractor that undercuts SDMC revenues is any body s guess. D. WHETHER MEP IS SEEKING TO ARGUE FM AGAINST THE COURT ORDER? D1. As per MEP the answer is No . D2. It has been submitted by MEP that SDMC is deliberately trying to twist the facts. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . WHETHER A RETIRED JUDGE SHOULD BE APPOINTED TO ADJUDICATE THE DISPUTES BETWEEN THE SDMC AND MEP? F1. As per MEP, it is evident from a bare reading of the order dated 31.01.2020 that though it is lengthy order, it is nonreasoned and reflects of prejudice. The SDMC has not been asked to file its reply. The documents of SDMC have suddenly appeared in the order, without the same being either brought on record by SDMC, nor the same were argued or even presented by them. The Commissioner proceeded as if he is the Party Respondent, therefore, he is aware of all the documents and facts of SDMC. It is to be further noted that many of the arguments advanced by the Commissioner to deny relief were not argued by SDMC. Since they had not filed any reply, therefore there is no question of any pleading on behalf of SDMC. In fact, SDMC barely replied orally to any assertion made by MEP and the order of the Commissioner, SDMC dated 31.01.2020 appears at best to be a reply of the SDMC to the allegations made by MEP. These allegations and reply in the form of an Order needs to be independently adjudicated. F2. This dispute resolution clause 19 contained in Agreement is provided for a t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate the disputes between the parties. This prayer has wrongly been rejected by the Single Judge on the basis of an inapplicable judgment. The said rejection has been challenged in the LPA 167/2020. G. WHETHER the orders of the High Court precluded SDMC from encashing the Bank Guarantee therefore the BG does not amount to payment? G1. As per MEP, the FM comes into effect on 19.02.2020 and therefore the liability to pay Rs.20 Cr. per week stood suspended from 19.02.2020. Therefore, per se MEP could not have been defaulted due to non-payment of Rs.20 Cr. on 09.03.2020 and 16.03.2020. G2. Without prejudice to the above contention, it is submitted by MEP that a bare reading of orders dated 26.11.2019 and 02.03.2020 shows clearly that the Court did not disturb the working of the Contract, except to the extent of reducing the weekly remittance. H. Issue of Post-Dated Cheques. H1. At the outset it is stated that PDC s never formed part of the agreement between MEP and SDMC. The very fact that SDMC now insists on the same shows the arbitrary manner in which it functions taking advantage of its dominant position. H2. It was argued by SDMC that MEP offered to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02.03.2020 and the said payments were to be made without prejudice to the respective rights and contentions of the parties. Apart from this, MEP was to pay Rs.20.00 crores per week in terms of the earlier order dated 26.11.2019 and another direction regarding issuance of fresh post-dated cheques was also to be complied with by MEP. Stay against coercive steps was granted subject to compliance of these directions and it was clarified that in case the payment of Rs.20.00 crores per week is not made or MEP commits any other default, the interim order shall stand automatically vacated. It appears that SDMC was more or less satisfied with this order, being interim in nature, subject to final outcome of the writ and the payments being made at reduced rate of Rs.20.00 crores per week by MEP instead of the contractual amount. On the other hand, MEP filed a detailed application being C.M.No.11093/2020 for modification of order dated 02.03.2020 purportedly on account of certain events which had taken place in the meantime. The main ground urged is the application of clause 15 of the contract regarding Force Majeure with effect from 19.02.2020 in terms of Govt. of India s notification of even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and thereafter this order was extended from time to time due to the pandemic situation as the physical hearings were suspended in the High Court of Delhi. SDMC encashed bank guarantees submitted by MEP totalling to Rs.64.00 crores between 31.03.2020 to 07.04.2020. In the meantime, the date of handing over of the toll booths was extended from time to time by learned Single Judge. On 14.05.2020, MEP had withdrawn its earlier LPAs against order dated 02.03.2020 passed in WPC No. 2241/2020 and a final order passed on 26.11.2019 in the earlier writ petition filed by the MEP. An online tender was issued by the SDMC and letter of intent was issued on 27.05.2020 to the successful bidder M/s Sahakar Global Limited. 16. By the impugned order dated 12.06.2020, learned Single Judge has come to the conclusion that the Force Majeure clause was rightly invoked by MEP vide notice dated 19.03.2020; however, national lockdown was declared on 24.03.2020, which was to be effective from the next day. Learned Single Judge had noticed that till the invocation of Force Majeure, the MEP had to comply with the directions issued by the Court and as per the said directions, a sum of Rs.20.00 crores had fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fallen due on 24.03.2020, which apparently is wrong date as it should have been 23.03.2020 and the said payment of Rs.20.00 crores has been said to be deferred on the ground of Force Majeure as per circular dated 19.02.2020 as well as order of the Full Bench of this Court dated 25.03.2020 extending interim orders prevailing as on 16.03.2020 till 15.05.2020 in first instance, which had subsequently been extended from time to time. It appears that the learned Single Judge has fallen into the error while observing in para 29 of the impugned order that Force Majeure came into effect from 19.02.2020 itself and this vital change was not brought to the notice of Court when order dated 02.03.2020 was passed. In the said paragraph itself, it was also observed that the payments due from MEP would have to be put into abeyance and directed time-line would not be applicable. 18. It appears that the relevant paras of the notification issued by MORTH, Government of India on 18.05.2020 might has escaped the minute attention of the learned Single Judge, although the notification was reproduced in the impugned order itself. If we read the entire OM dated 18.05.2020, it clarifies that as far as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be provided: (i) Waiver of the difference between agreed remittance as per contract agreement and the estimated remittance based on the traffic data during the above period. (ii) Waiver of penal interest for delayed/short remittance for the above period as per contract provisions. (iii) Reimbursement up to 50% of the Administrative Toll Collection Expenses to be calculated based on fixed annual administrative charges on lane basis as per NHAI procedure. 19. As per OM dated 18.05.2020, the first period for which Force Majeure is to be invoked for toll collection is from 26.03.2020 to 19.04.2020 and the Government of India was pleased to waive the entire agreed remittance of the contractors and apart from this it was ordered that 75% of the administrative and toll collection expenses incurred by the collectors were to be reimbursed. It is to be noticed that this was the period of first nationwide lockdown/curfew during which the Government of India had suspended collection of tolls on the toll booths being operated by NHAI or its contractors. Since there was no collection of tolls by various contractors employed by NHAI, so the Government had waived off the agreed rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17.02.2020 2301400 4232500 6536900 18.02.2020 2424200 4318900 6743100 19.02.2020 2451900 4374500 6826400 20.02.2020 2359900 4277900 6637800 21.02.2020 2273900 4117500 6391400 22.02.2020 2147100 3811000 5958100 23.02.2020 1897200 3683800 5581000 24.02.2020 2077300 3924300 6001600 25.02.2020 2346600 3170300 5516900 26.02.2020 2372500 3150600 5523100 27.02.2020 2479800 3285000 5764800 28.02.2020 2494100 3370900 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1442066 3315666 20.03.2020 1823700 1470390 3294090 21.03.2020 1439200 1022826 2462026 22.03.2020 405300 298400 703700 23.03.2020 191400 240000 431400 24.03.2020 162100 171600 333700 25.03.2020 110700 113900 224600 26.03.2020 121300 162600 283900 27.03.2020 121600 136900 258500 28.03.2020 141900 138700 280600 29.03.2020 124900 140000 264900 30.03.2020 141300 154400 295700 31.03.2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh it has been argued on behalf of SDMC that mere availability of a right to invoke bank guarantee cannot be treated equal to the payment to be made on weekly basis by MEP but the act of invocation of these bank guarantee by SDMC, without any reference to the Court, clearly shows that at least the amount of Rs.41.40 crores (after adjusting the ECC amount) was available to MCD at any given point of time and the short-fall in the weekly payment due on 09.03.2020 and 16.03.2020 could have been met by invoking the said bank guarantees. It is made clear that although by 16.03.2020 MEP was not in default in view of availability of the bank guarantees at the disposal of SDMC but on 17.03.2020 the MEP had committed default of the order of the court by not remitting the deficient amount to clear the payment of Rs.38.00 crores due on the said date. Moreover, on 23.03.2020 when the next payment of Rs.20.00 crore as due, there was no lockdown and hence no Force Majeure benefit was available to MEP, hence Rs.20.00 crores was to be paid on 23.03.2020, which apparently was not paid by MEP to SDMC, although SDMC must have collected a portion of it through the fast tag mode which transfers the mone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after affording opportunity to both sides to address their arguments. The option of ordering the settlement of dispute by alternative dispute resolution mechanism is also open to the learned Single Judge, of course with consent of the parties. 25. There is a serious dispute regarding the actual number of vehicles passing through the toll gates during the Force Majeure period as MCD is claiming that a large number of vehicles are passing through the said toll gates whereas claim of MEP is that lesser number of vehicles are passing through the said gates. MEP was expected under the clauses of the contract to give average weekly traffic count and to calibrate the toll collection system with the servers of MCD. To put this controversy at rest, the learned Single Judge may explore all the possibilities to arrive at a reasoned conclusion as to whether the number of vehicles passing through these toll plazas are correct or not as different figures are being claimed by the contesting parties. The said exercise is also necessary to decide two contempt petitions filed by both the parties against each other, which are pending adjudication before this Court. The MCD has submitted a video fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned to order the same without the consent of the other party. 28. As far as the order of the Full Bench of this Court regarding extension of the interim order prevailing as on 16.03.2020 vide order dated 25.03.2020 is concerned, it is clarified that the said order nowhere states that the conditional stay orders will be extended without complying with the conditions. Although the cancellation the contract cannot take place but if the contractor does not comply with condition of payment of ordered amount, it cannot take any benefit of the order of the Full Bench dated 25.03.2020. 29. In view of the above, we hereby dispose of both the Letters Patent Appeals by holding that: 1). The Force Majeure clause stands invoked w.e.f. 26.03.2020 in terms of OM dated 18.05.2020 issued by MORTH, Govt. of India and it shall stand revoked when 90% traffic, in comparison to the traffic before lockdown period of weekly basis, stands resumed. 2). The SDMC shall be entitled to weekly payments of Rs.20.00 crores till 25.03.2020 and after resumption of 90% traffic in comparison to the pre-lockdown period on weekly basis during pendency of the writ petition. Arrears of Rs.115.04 crores are hel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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