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TMI Blog2018 (11) TMI 1229X X X X Extracts X X X X X X X X Extracts X X X X ..... ement, construction, completion, operation, maintenance and the toll collection of certain sections of the NH-8 highway. 4. The arrangement under the SSA was that the Concessionaire of the NHAI shall not only collect the toll under the concession agreement executed between NHAI and its Concessionaire, but also the entry toll (toll tax) levied by the Appellant-SDMC on entry of specified commercial vehicles into the territory of NCT of Delhi. The Appellant-SDMC is a 'designated agency' of the Government of NCT of Delhi under the SSA. 5. The Appellant-SDMC, for the purpose of collection of toll tax from all border entry points within the NCT of Delhi, decided to engage a contractor and accordingly floated a tender, inviting bids from interested parties. The Respondent-SMS AAMW being the successful bidder was awarded the work for collection of toll tax for a period of 3 years and a Bilateral Agreement dated 14.05.2011 (hereinafter referred to as 'the Agreement') was entered into between the Appellant-SDMC and the Respondent-SMS AAMW. 6. As per the Agreement, the Respondent-SMS AAMW was obliged to pay an amount of Rs. 26 crores every month to the Appellant-SDMC in lieu of the tax col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd and the Respondent-SMS AAMW on the other hand contains an agreement for arbitration. 12. The Agreement dated 14.05.2011 provides for the various mutual rights, liabilities and obligations of the two parties for the collection of toll tax from specified commercial vehicles at all border entry points within the NCT of Delhi. Clause 16 of the Agreement in its entirety reads as follows: - "16. DISPUTE RESOLUTION 16.1 Except where otherwise provided in the Agreement, all questions and disputes in any way arising out of or relating to the Agreement shall be dealt with as mentioned below. 16.2 In the event the Contractor considers any work demanded of it as being outside the requirements of the Agreement, or disputes any record or decision given in writing by the Competent Officer in any matter in connection with or arising out of the Agreement, to be unacceptable, it shall promptly within [15] days request the Competent Officer in writing to give his instructions or decision in respect of the same. Thereupon, the Competent Officer shall give his written instructions or decision within a period of [30] days from the receipt of the Contractor's letter. 16.3 If the Competent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 26.05.2015, the Contractor i.e. SMS AAMW filed an appeal under Clause 16.3 of the Agreement. This appeal was preferred against the decision contained in the letter of the Competent Officer, SDMC dated 13.05.2015. The Appellant-SDMC sought to produce additional evidence and further sought that the decision should be taken under Clause 16.3. There is no doubt that the Respondent-SMS AAMW resorted to the provision of appeal against the decision of the Appellant-SDMC in its letter dated 13.05.2015. In that letter, they did not seek the appointment of an arbitrator but merely sought decision by an officer higher in rank than the members of high level committee, akin to invoking an appellate provision. 16. The question before us is whether Clause 16.3 which provides for an appeal really provides for an arbitration and therefore whether the High Court was entitled to appoint an Arbitrator under Section 11(6) of the Act. 17. It is necessary to advert to certain features of Clause 16 to determine whether the clause provides for arbitration or a departmental appeal. Firstly, Clause 16.3 under which an application to appoint an Arbitrator under Section 11(6) of the Act was made is de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the parties was that he should hold an enquiry in the nature of a judicial enquiry and hear the respective cases of the parties and decide upon evidence laid before him, then the case is one of an arbitration. The intention in such case is that there shall be a judicial inquiry worked out in a judicial manner. On the other hand, there are cases in which a person is appointed to ascertain some matter for the purpose of preventing differences from arising, not of setting them when they have arisen." 21. This was relied on by the Respondent-SMS AAMW to support the submission that Clause 16.3 does not provide for an appeal to the Commissioner but provides for arbitration by the Commissioner. The passage above clearly contemplates that an arbitration should be an enquiry in the nature of a judicial enquiry i.e. an enquiry which involves hearing both the parties. The appeal involved in the present case clearly does not involve hearing both the parties. On the contrary, the authority which decides the appeal is in a sense the other party. The Commissioner is a higher officer than the Competent Officer in the same organization. It is, therefore, clear that the appeal to the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and whether the agreement requires the tribunal to decide the dispute according to law." 23. The scope of Clause 16 is limited. Clause 16.1 provides that all the questions and disputes arising out of the Agreement shall be dealt with as follows i.e. as provided in Clause 16.2 and Clause 16.3. Clause 16.2 enables a Contractor to request the Competent Officer to give his instructions or decisions in writing, in case of either when (a) the Contractor considers any work demanded of him as being outside the requirements of the Agreement, or (b) disputes any record or decision given in writing by the Competent Officer in connection to the Agreement as unacceptable. The Competent Officer is enjoined to give his written instructions or decisions within a period of 30 days. He enjoys complete discretion in deciding the dispute. Clause 16.3 provides that in case of an instance whereby the Competent Officer does not come to a decision, the Contractor may appeal to the Commissioner who shall afford an opportunity to the Contractor to be heard and offer evidence. Neither the Competent Officer nor the Commissioner is enjoined to act judicially i.e. the decision on the basis of evidence adduc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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