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TMI Blog2013 (12) TMI 1751X X X X Extracts X X X X X X X X Extracts X X X X ..... pted and concession agreement dated 11-4-2003 was entered into between the petitioner No. 1 and the respondent No. 1 with regard to construction and maintenance of Sagar-Damoh-Jabalpur road on BOT basis. Thereafter, the petitioner, respondent No. 1 and the Government of Madhya Pradesh entered into a State Support Agreement on 14-4-2003 under which State Government guaranteed the implementation of terms and conditions of the concession agreement by respondent No. 1. The respondent No. 1 vide letter dated 12-7-2007 rescinded the contract under Clause 32.2 of the concession agreement on the ground that the petitioner could not complete the work within the stipulated time. Clause 39 of the concession agreement provides for settlement of the dispute through arbitration under the 1996 Act. After protracted correspondence, the petitioner appointed Mr. R.C. Chugh as an Arbitrator under Clause 39 of the concession agreement whereas the respondent No. 1 appointed one Mr. K. Shankar Narayanan as an Arbitrator vide letter dated 9-3-2011. The two nominated Arbitrators appointed Mr. K.K. Sethi as Presiding Arbitrator in the meeting of the Arbitrators which was held on 5-4-2011. 2. The petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t submitted that there is a difference between the concession agreement and works contract. It is further submitted that the respondent No. 1 itself in Paragraph 11(c) in the statement of defence filed before the Arbitral Tribunal has admitted that the contract in question is a concession agreement therefore, the respondent No. 1 cannot be permitted to change its stand now. In support of his aforesaid submission, learned Senior Counsel has placed reliance on the Constitution Bench decision of the Supreme Court in Electrical Corporation of India Vs. Secretary, Revenue Department Government of Andhra Pradesh, (1999) 4 SCC 458. It is further submitted that the concession agreement specifically provides that the dispute between the parties has to be resolved in accordance with the provisions of the 1996 Act. Learned Senior Counsel while referring to the decision of the Supreme Court in VA Tech Escher Wyass Flovel Ltd. Vs. M.P. State Electricity Board and another, (2011) 13 SCC 261 and Ravikant Bansal Vs. M.P. Rural Road Development Authority and another, (2012) 3 SCC 513, submitted that the Supreme Court has held that 1983 Act applies where there is no arbitration clause in the contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is a case of drafting error which has been caused inadvertently and in any case there cannot be admission against law. In this regard, reference has been made to the decisions in the cases of Jalandhar Improvement Trust Vs. Sampuran Singh, AIR 1999 SC 1347 and Madan Gopal Kanodia Vs. Namraj Maniram and others, (1977) 1 SCC 669. It was further submitted that under Clause 44.3 of the concession agreement, even after termination of the contract, the rights and obligations of the parties shall be governed by the 1983 Act, and the order passed by the Trial Court does not suffer from any error apparent on the face of record warranting interference by this Court in exercise of power under Article 227 of the Constitution of India. Reliance has also been placed on the decisions in Surya Devi Rai Vs. Ram Chander Rai and others, AIR 2003 SC 3044, Shalini Shyam Shetty and another Vs. Rajendra Shankar Patil, 2010 AIR SCW 6387 and Radhey Shyam and another Vs. Chhabi Nath and others, 2009 AIR SCW 4006. 7. I have considered the respective submissions made by learned Counsel for the parties. The 1983 Act is an Act enacted under Entry 13 of List III of Seventh Schedule of the Constitution of Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputes to arbitration and to allow the Tribunal full jurisdiction except in cases of hopeless confusion. [See: Russel on Arbitration, Twenty Third Edition Page 68]. 9. In view of aforesaid well-settled legal position, the provisions of the concession agreement executed between the petitioner No. 1 and the respondent No. 2 need to be examined. The parties have described the agreement as concession agreement . Under the aforesaid agreement, the respondent No. 1 had granted the petitioner concession for a period of 5440 number of days, commencing from the commencement date including the right, licence and authority during the subsistence of the agreement to implement the project and the concession in respect of the project highway. The petitioner was awarded the work of construction and maintenance of 176 kilometres of road forming the part of National Highway No. 37. Clause 9 of the agreement defines the obligations of the petitioner No. 1 whereas Clause 10 thereof defines obligations of the respondent No. 1. Clause 39.3.1 provides that any dispute which is not resolved amicably as provided in Clauses 39.1 and 39.2 shall be finally decided by reference to arbitration by a Board of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contract. The works contract is a lump sum contract wherein the contractor has to quote the amount for execution of the work based on details furnished by the employer. There is no necessity for creation of any Escrow Account in works contract. In works contract, the payment is made against the running account bills prepared by contractor and submitted to the employer periodically. Whereas in concession agreement, the concessionaire has to utilise and arrange the funds. The concessionaire under the agreement after completion of the construction recovers the amount invested by him for completion of the project by way of toll. No State Support Agreement is executed in case of a works contract whereas the same is executed in a case of concession agreement. It is pertinent to mention here that the petitioner is not liable to pay Value Added Tax, Sales Tax and other taxes under the concession agreement, which are payable under the works contract. The aforesaid salient features clearly show that there is distinction between the works contract and concession agreement. As stated supra, the State Support Agreement forms an integral part of concession agreement and both have to be read to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material and equipment construction. The contract value of such contract is the mutual settlement between EPC contractors and concessionaire and respondent has no role in that. As per agreement prior approval for entering EPC contract has to be taken. The higher cost of EPC contract entered by claimant is his own will and respondent are not concerned with that. 14. Thus, both the parties have clearly understood the agreement to be a concession agreement and had consciously taken a decision that the dispute between the parties shall be resolved under the 1996 Act. The respondent No. 1 in view of its admission made in Paragraph 11(c) of the statement of defence filed before the Arbitral Tribunal cannot be permitted now to contend that the agreement in question is a works contract, as admission in the pleading stands on a higher footing than evidentiary admission and is fully binding on the party making such an admission. [See: Nagindas Ramdas Vs. Dalpatram Iccharam alias Brijram and others, AIR 1974 SC 471]. 15. Even assuming that the agreement in question is not a works contract, yet for another reason the dispute between the parties has to be resolved under the provisions of 1996 A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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