TaxTMI 
TaxTMI 
2016 (2) TMI 1386
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....ant No. 1 was incorporated as "Special Purpose Vehicle" (SPV) for the purpose of implementing the Dewas Bypass Road Project. Thereby indicating that the appellant No. 2-Company was engaged inter aha in the business of construction and civil works. It has been submitted by the Counsel for the appellants that it was one of the leading highway developers in the country and have executed various prestigious projects on the National as well as State level. That the respondent No. 1 State of M. P. through its Principal Secretary, Public Works Department, Bhopal issued bid notice No. 13/2000-2001/SAC/Dewas dated 18-7-2001 inviting bids for construction, replacement, periodical renewal and maintenance of Dewas Bypass Road for a total length of 19.8 kilometers and the construction included of one medium bridge, 27 culverts, junctions and rotaries, protection works, toll tax barriers and booth, plantation, fencing, truck parking lay-bye and longitudinal drains etc. as fully detailed in the petition. The project was to be under the B.O.T. Scheme i.e., under the Build Operate Transfer Scheme whereby the Contractor has the right to collect the toll and the other revenue from the vehicles and us....
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....iled Writ Petition No. 1122/15 under Article 226 of the Constitution of India. The Writ Court, however, dismissed the petition as not being maintainable, but granted liberty to challenge me impugned order dated 16-2-2015 in appeal. The petitioner being affected, however filed a Review Petition urging that the impugned agreement was a concession agreement and amenable to writ jurisdiction as well as provision of the Arbitration Act of 1996. The review was, however, dismissed by holding that me contract was a "works contract" as defined under the Madhya Pradesh Madhyastam Adhikaran Adhiniyam, 1983. And thereafter by way of precaution the petitioner filed both the Arbitration Appeal and at the same time also filed an SLP before the Apex Court. The Apex Court held that "the finding of the High Court, that the dispute between the parties pertains to the works contract; and as per terms of the contract any dispute that arises, the matter would be referred to the M.P. Arbitration Tribunal under the Madhya Pradesh Madhyastam Adhikaran Adhiniyam, 1983"; shall not stand in the way of the appellants-petitioners in prosecuting the First Appeal. The Apex Court held thus:-- "The aforesaid obse....
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....denying opportunity of lawful remedy to the appellant. 5. Per contra, Counsel for the Respondents has vehemently urged the fact that the State had already taken over the Toll collection from the appellant on the Dewas Bypass road and impugned order dated 16-2-2015 passed by the First Additional Sessions Judge, Dewas was in accordance with the provisions of law since the dispute between the parties falls within the purview of Works Contract and hence the learned Judge has rightly rejected the application under section 9 of the Act of 1996. Besides the appellant also had the alternative remedy to approach the M.P. Arbitration Tribunal under the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983. Moreover section 17-A of the Adhiniyam of 1983 also provides for grant of interim relief and the appellant has failed to approach the Arbitration Tribunal; whereas the appellant has filed an application under section 9 of the Act of 1996 which was contrary to the provisions of law. So also Clause 26.2 of the Agreement also contains the Arbitration Clause and the fact that the appellant should have referred the matter to the Arbitration Tribunal under section 17-A of the Adhiniyam 1983 but ....
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.... arose between the parties. 6. Counsel for the respondents submitted that proviso to Clause 26.2 provided for the appropriate remedy to approach the Arbitration Tribunal constituted under the Adhiniyam 1983. Simpliciter the construction was to be made by the appellant at his own cost (capital). However, consequently as per the scheme of the BOT the petitioner was to recover the capital or money used by him in the construction by collecting the toll for a fixed number of days as stated in the bid by the appellant himself under the principles of yearly Cash Flow Statement and FIRR (Financial Internal Rate of Return) method. Moreover the Additional Works Committee had fixed the number of toll days and in its meeting dated 16-1-2006, the Committee had approved of the extra cost of the additional work at Rs.10,26,22,743/- and additional works of the contract are allotted. The auditor took an objection by report dated 9-10-2009 indicating that the advantages were given to the contractor without considering the long completion of work. In fact Counsel vehemently urged that left out work was yet to be certified despite which authorization for collection of toll of 103 and 77 days for the ....
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.... Spedra Engineering Corporation Engineers and Contractors, Bhopal v. State of M. P. and others, 1987 MPLJ Online 1 : AIR 1988 M. P. IIIthe Court had held that even if there is no clause for the appointment of an Arbitrator, the M.P. Madhyastham Adhikaran Adhiniyam is a special enactment providing for statutory arbitration arising out of disputes in respect of works contract and would prevail over Arbitration Act in Madhya Pradesh in view of Art. 254(2). 10. Also placing reliance on Smt. Kamini Malhotra v. State of M. P. and others, 2002(3) M.P.L.J. 389 : 2002(5) MPHT 245 this Court had held that the work of construction of Water Treatment Plant was a work relating to "works contract" and on combined reading of sections 7 and 20 of M.P. Madhyastham Adhikaran Adhiniyam, 1983, the Civil Court's jurisdiction to entertain and decide any dispute relating to "works contract" was barred and the order of the Court of the A.D.J, returning the application for presentation to proper forum, affirmed. 11. Counsel for Respondent has vehemently urged the fact that a Full Bench decision in the matter of Shri Shankaranarayana Construction Company v. State of M. P. and others, 2008(1) M.P.L.J. ....
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....en over the toll collections from the petitioner and made a categoric statement that the petitioner is not collecting any toll on Dewas Bypass road at present. Hence the urgency and efficacy of the application under section 9 of the Arbitration and Conciliation Act 1996 for grant of interim relief before the A.D.J. Dewas has lost its urgency and efficacy and now the purely legality of the questions remain to be answered whether the contract in dispute would be a works contract or it would be a concession agreement. At this juncture it is also important to note that the dispute between the parties arose on 28-12-2014 during the subsistence/existence of the contract period since the contract period commenced from 24-5-2004 to 31-3-2012 and by the additional contract from 1-4-2012 to 17-12-2015, when the application under section 9 of the 1996 Act was moved. 15. Then placing reliance on Jabalpur Corridor (India) Pvt. Ltd. (supra) we have no hesitation in holding that in the present case it was the Ashoka Buildcon who had to utilise and arrange the funds and after completion of the construction recovers the amount invested by it for completion of the project by way of toll. Thus the p....
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....ompletion 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. Under the agreement the petitioners are under an obligation to prepare a detailed design, engineering, financing, procurement, construction, operation and maintenance of the project road. Thus, the project is deemed to be leased out to the petitioners for maintenance as well as collection of toll and regular entry and exit taking care of the project road. Thus, the project is deemed to be leased out to the petitioners for maintenance as well as collection of toll and regular entry and exit taking care of the project road, till the expiry of the concession period. The agreement provides execution of EPC contract and other contracts for execution of the project. The petitioner was also at liberty to employ other contractors for items of works as considered necessary for execution of the project. The petitioner, respondent No. 1 as well as the State Government have entered into an agreement, namely, State Support Agreement on 14-4-2003 in pursuan....
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....o the fact that the scheme was BOT as framed by the State Government (Build, Operate, Transfer). The word 'concession' has been used repeatedly in the agreement and although it has been discarded cursorily by the Counsel for the respondents-State in the reply stating that a misnomer has been used by the Executive Engineer but considering the Clause 24, 25 and 26, it is evident that it is a 'concession agreement'. Clause 24.3 is the toll tax authorization and by 24.3 a concession is given to the appellants-petitioners in case of completion of work earlier than the stipulated period then additional days of authorisation for collection of toll was made. Similarly Clause 25 is a force majeure and is the security clause indemnifying the contractor by extending the toll collection for contingencies. When this read in conjunction or juxtaposition with Clause-22.1.1 then the tripartite security is evident since in case of termination of contract due to force majeure or otherwise the payments due and payable to the entrepreneur would be paid by the Government and entrepreneur was also requested to open an ESCROW account and deposit all the revenue from the project into it. T....