M/S. SOMA ISOLUX NH ONE TOLLWAY PRIVATE LIMITED v. HARISH KUMAR PURI & ORS.

51Copy pinpoint51. In fact, even at this stage before this Court, the respondent NHAI has merely contended that the Toll Point!Toll Plaza should not be allowed to be shifted from the point determined earlier and has been asserting that the Toll Plaza H

M/S. SOMAISOLUX NH ONE TOLLWAY PVT. LTD. v 665 HARISH KUMAR PURI [GYAN SUDHAMISRA, J.]

should not be shifted from 146 KM to 110 KM. In fact, the respondent No.6 NHAI neither before the High Court nor before this Court even remotely had contended that the contract should be nullified although it has contended that shifting of Toll Plaza should not be permitted as the same according to their averment is contrary to the terms and conditions of the agreement.

52Copy pinpoint52. There is yet another feature which catches attention but has been missed by the High Court that when the High Court itself had prevented the NHAI from proceedings with a show cause notice given to the appellant -concessionaire company and has gone to the extent of passing an order for keeping the show cause notice in abeyance and the NHAI itself has not contended either before the High Court or before this Court for terminating the contract except that it has been opposing the shifting of Toll Plaza, whether the High Court on its own could do the same without examining the contractual obligations. Taking the worst case/situation and even assuming that the stand of the respondent NHAI were to be accepted, the appellant at the most could be prevented from shifting the Toll Plaza from a pre-determined point to another point in which case the appellant might have to continue with the project by not allowing it to change the location of the Toll Plaza but the same cannot entail the consequence of final termination without adjudication at least by an arbitrator for which there is a clear provision in the Agreement itself. In any event, the question of termination of the Concession Agreement without adjudication could not arise at all when the High Court was merely considering the application seeking vacation of the stay order to the show cause notice issued by the NHAI. In case, it had rejected the application, the show cause notice issued by the G NHAI to the appellant could have proceeded. But the High Court seems to have taken a giant leap forward by terminating the contract for all practical purposes without expressly using the expression "termination" when it directed the NHAI to take H

666 SUPREME COURT REPORTS . [2014) 14 S.C.R.

A over the project from the appellant- company and continue with the project and complete it, nullifying the contract in its entirety.

53Copy pinpoint53. The High Court seems to be completely oblivious of the fact that it was dealing only with the limited question as to B whether the NHAI was correct in issuing show cause notice to the appellant which the High Court itself by its own order allowed it to be kept in abeyance for which the NHAI respondent No.6 had filed an application for vacating this order. Thus, on the· other hand, it kept the order of show cause notice by the NHAI C in abeyance. but when the NHAI came up for vacating the said order, the High Court straightway directed the NHAI to take over the project itself from the appellant-company without caring about its impact on the Agreement which clearly resulted in its cancellation. The High Court ought to have realised that if it could not traverse the terms of the Agreement which the High Court itself has observed, it surely could not have passed an order which unequivocally had the effect of canceling the . Agreement and that too without any adjudication.

54Copy pinpoint54. At this juncture, it is difficult to overlook that the appellant admittedly has completed 71 per cent of the 291 KM stretch and now barely 29 per cent is yet to be constructed which is enmeshed in litigation over the question as to whether the Toll Plaza should be permitted to be shifted or not This aspect as was contended by the res·pondent No.1, had not been gone into by the High Court clearly missing that this question had been raised in the PIL before the High Court wherein the N HAI & Ors. were a party wherein the appellant had been permitted to shift the toll plaza. It needs to be highlighted even at the cost of repetition that the dispute· G regarding shifting of Toll Plaza was earlier raised before the High Court by two separate writ petitions, the reference of which have been given hereinbefore vide CWP No.21332/ 2011 and CWP No.23971/2011 which were filed by two PIL petitioners but the petitions were rejected. In one of the writ petitions as noted earlier, an LPA was also filed in the High

M/S. SOMA ISOLUX NH ONE TOLLWAY PVT. LTD. v 667 HARISH KUMAR PURI [GYAN SUDHAMISRA, J.]

Court but the same was dismissed and the dispute regarding shifting obviously attained finality and could not have been urged all over again before the High Court. It is however difficult to appreciate that in spite of the dispute having been settled regarding shifting of Toll Plaza by the High Court of Punjab and Haryana which clearly attained finality, the respondent NHAI B did not permit the appellant- company to shift the Toll Plazas, although it had failed to prefer any appeal against the judgment and order passed by the High Court in CWP No.21332/2011 and LPA No.170/2012 challenging such permission.

55Copy pinpoint55. It is no doubt true that the respondent-Union of India C has come up to the rescue of the respondent-NHAI when it contended that if terms and conditions in the contractual ·agreement is contrary to a statute, the Union of India would be legally authorized to override the terms and conditions of the contractual agreement. But as already recorded herein before, the facts of the instant matter clearly establishes that it is not even the case of the respondent that the terms and conditions incorporated in the Concession Agreement was contrary to any statute or central legislation so as to offer a plank to the contesting respondent specially NHAI to urge that the provision under the Concession Agreement had been overriding a statutory provision of any central legislation in absence of any fact or situation establishing even remotely that the agreement suffered the vice of violating any central statute/legislation.

56Copy pinpoint56. Thus, apart from the fact that the dispute regarding the shifting of Toll Plaza had already been adjudicated by the High Court earlier on two occasions, the details of which have been given hereinbefore and the Concession Agreement not being in violation of any legislation of the centre, the dispute regarding shifting of Toll Plaza obviously could not have been gone into by the High Court all over again in the PIL. But while nullifying the contract on the ground of delay, the dispute regarding shifting of Toll Plaza which was clearly the only contentious issue for not completing the project, could not have been given a go bye or ignored in any manner by the High H

668 SUPREME COURT REPORTS [2014] 14 S.C.R.

A Court while taking an undertaking from the appellant and thereafter cancelling the Concession Agreement itself when it admittedly did not traverse the terms and conditions of the Agreement.

57Copy pinpoint57. Beside the above, it is more than well settled that a B question or an issue which has been raised earlier before the High Court, adjudicated on which a final judgment/order was delivered, cannot be allowed to be raised for the second time as that would be clearly barred by the principle of constructive res judicata which is too well known a principle to be dealt C with herein. Suffice it to say that the well-acknowledged principle and equally well settled legal position seems to have been ignored and lost sight of not merely by the respondents but by the appellant company also which filed a writ petition in the High Court of Delhi raising the issue of shifting of Toll Plaza D which finally was dismissed since the High Court of Punjab and Haryana had already dealt with it as also by filing an application for referring the dispute to the Arbitrator under the Arbitration and Conciliation Act, 1996 completely overlooking that at least this part was not permissible to be referred for E arbitration once on the judicial side permission to shift the Toll Plaza was permitted by the High Court of Punjab and Haryana vide its judgment and order passed in CWP No.21332/2011 and LPA No.170/2012 which had settled the issue regarding shifting of Toll Plaza.

58Copy pinpoint58. Besides the aforesaid legal protection which the appellant enjoyed on account of the judgment and order in its favour given by the High Court, the terms and conditions in the Concession Agreement itself regarding shifting of Toll Plaza was approved by the NHAI which permitted that the Toll Plaza G could be shifted provided the Independent Engineer appointed by the NHAI approved of the same. No doubt, initially the Independent Engineer (I.E. for short) initially expressed certain reservations regarding the relocation of the Toll Plazas vide letters dated 18.3.2010, 2.4.2010 and 29.5.2010 but H

M/S. SOMA ISOLUX NH ONE TOLLWAY PVT. LTD. v · 669 HARISH KUMAR PURI [GYAN SUD HA MISRA, J.]

subsequently the Independent Engirieer, Project Director and A CGM NHAI in their recommendations recorded their view that the location of two Toll Plazas is for differentfacilities provided to the public and, therefore, there is no reservation locating Toll Plaza at KM 110. In fact, it needs to be highlighted that in terms of Article 48.1 of the Concession Agreement, liberty has B been granted to the appellant to decide the locations of Toll Plaza in consultation with the I.E. and the same was finally approved by the I.E. M/s. Louis Berger who conveyed his approval to the change of location as proposed by the appellant and hence the same cannot be allowed to be re-agitated c despite confirmation of the same by the High Court vide its judgment and order passed in the writ petitions and the LPA against which no appeal was preferred either by the NHAI or the Pl L petitioner or any other concerned respondents.

59Copy pinpoint59. Thus, the stand of the NHAI appears to be clearly illegal and arbitrary and a clear case of an after thought taken in the present proceedings before this Court as the NHAI ad idem was in complete agreement with the appellant as regard its right for relocation of Toll Plazas. The same is recorded and clearly reflected in the correspondence of various officers of NHAI, minutes of meeting, stand of Independent Engineer including its stand before the High Court of Punjab and Haryana and hence the NHAI cannot be permitted to resile from its stand at this distant point of time as the affidavits were filed as early as 2011 which finally upheld the location of the Toll Plazas. F The correspondence on record further belies the stand now taken by the NHAI as various officers of NHAI were of the same view that relocation of Toll Plazas is permissible under the Agreement and the change in stand happened in the meeting held for the first time on 21.3.2013 when the present Chairman G took the stand that relocation is impermissible and the decision not to permit relocation of Toll Plazas was taken as late as on 3.5.2013 which is not merely highhanded and illegal but contrary to the judgment and order of the High Court which permitted relocation vide its reasoned judgment and orders as already H

670 SUPREMECOURfREPORTS [2014] 14 S.C.R.

A referred to hereinbefore-which were never challenged and hence attained finality. Moreover, based on the in principle approvals granted by NHAI and the stand of NHAI, the lenders continued to disburse funds and the appellant continued to invest in the project on the plea that the implementation of the decision to relocate the Toll Plazas would be done after the decision of the High Court of Punjab and Haryana upholding the relocation of Toll Plazas. It is therefore too late in the day fortheNHAI to take such specious and untenable plea with a view to wriggle out of its obligation which cannot be permitted by this Court.

60Copy pinpoint60. In fact, this Court was informed that the officers of the NHAI which had approved of the shifting of Toll Plazas are facing departmental action which has been initiated against Rajeev Kumar Koundal, S.S. Geharwar and S.I. Patel. But the stand of the NHAI appears to be clearly an afterthought and an attempt to justify its irrational/arbitrary/conflicting stand with regard to the rights of the appellants for deciding the location of Toll Plazas under the Concession Agreement and the approvals granted by NHAI under the said agreement. The E alleged action initiated by the NHAI, therefore, cannot justify its stand taken before this Court for the first time nor can it permit to act contrary to the terms of Concession Agreement ignoring the ord.~rs passed py the High Court qn t_he judicial side in two PIL petitions which were filed challenging the order for relocation of Toll Plazas.

61Copy pinpoint61. It is rather chaotic as also jurisdictional error that in spite of several orders passed by three different co-ordinate Benches of the High Court on the judicial side permitting relocation of the Toll Plazas, the dispute did not set at rest and the High Court while dealing with the PIL has not even taken note of the fact that if it was nullifying the Concession Agreement on the ground of delay of the project without entering into the rights and obligations of the Concessionaire- appellant and Respondent No.6 NHAI ignoring that the NHAI H could not have been permitted to get away from the onus of

MIS. SOMA ISOLUX NH ONE TOLLWAY PVT. LTD. v 671 HARISH KUMAR PURI [GYAN SUDHAMISRA, J.]

delaying the project when it failed to honour its contractual obligation.

62Copy pinpoint62. The entire exercise of the High Court while passing the overzealous directions giving a go by to the rights and obligations under the Concession Agreement and the orders passed by the High Court while dealing with limited issue in the PIL as to whether a show cause notice by the NHAI was justified or not could not have refused to scrutinize the reasons for the delay on the ground that it was not entering into the terms and conditions of the contractual agreement and yet went to the extent of nullifying the agreement oblivious of its consequence that the impugned direction of the High Court clearly resulted in cancellation of the agreement itself.

63Copy pinpoint63. It is further difficult to overlook that over 71 per cent of the Highway Project having been admittedly completed by the appellant-Concessionaire, it would delay the project without reason and is not sincere in its attempt to complete it as delaying the project cannot possibly benefit the appellant- Concessionaire since the income would be generated by the appellant only wlien the Toll Plaza is constructed and the revenue from toll at present is being deposited in the E ESCROW account. It further cannot be overlooked that the NHAI is not funding the project in any manner as the agreement is in the nature of BOT mode which means Build, Operate.and Trade ('BOT' for short) and the appellant cannot generate profit without undertaking the construction further. It is, therefore, pertinent to take note of the fact that the project being in BOT mode, all investment in the project has to be made by the appellant and no amount is received from NHAI. It may further be noted that the agreement between the appellant and respondentNo. 6 NHAI acknowledges and confirms the role of lending institutions, mainly nationalized banks as a major significant holder in project implementation. All the financing agreement dealing with the administration occurred between . lending institutions and the petitioner as well as the financial model for the project has been submitted that their revenue H

672 SUPREME COURT REPORTS (2014] 14 S.C.R.

A and approval prior to the commencement of the project. The appellant-Concessionaire therefore states that it is committed to the completion of the project asserting that its endeavour is to complete the six laning works at the earliest since it is not a gainer in any manner if the project is at a stand still and the appellant also would gain only if the project is started.

64Copy pinpoint64. Consequent upon the aforesaid analysis of the background of the matter and the sequence of events arising out of a Public Interest Litigation which led to the execution of a Concession Agreement creating contractual relationship between the appellant Concessionaire-company and the respondent No. 5 NHAI, it is manifest that the High Court has issued over zealous directions which has resulted into termination of the concession agreement itself when it directed the respondent No.5 NHAI to take over the project from the appellant and ensure the balance construction of the highway project by itself. Although, the High Court has observed that it was not entering into the arena of the contractual terms and conditions of the agreement, it has clearly nullified and terminated the contract itself when it directed the NHAI to take over the project from the appellant-company overlooking the bonafide of the appellant-company which has already completed major portion of the construction which is 71 per cent of the total area of 291 KMs and only 29 per cent is to be constructed further, when a dispute arose between the appellant-company and the respondent NHAI in regard to shifting of the Toll Plaza from KM 146 to KM 110 and KM 212 to KM 211 and the NHAI for the first time in 2013 reneged from its consent to permit shifting contrary to the terms of the agreement. However, in course of oral argument before this court, the respondent NHAI had yielded and did not seriously dispute the shifting from KM 212 to KM 211 and rightly so as the shifting is hardly at a distance of 1KM from KM 212 to KM 211 at Shambhu Toll Plaza which is negligible and the shifting has already taken place as discussed hereinbefore. But, the respondent No.5 NHAI has raised serious objections in regard

MIS. SOMA ISOLUX NH ONE TOLLVVAY PVT LTD. v 673 HARISH KUMAR PURI [GYAN SUDHAMISRA, J.]

to shifting of the Toll Plaza from KMs 146 to KM 110 which appears to have been done for the first time in the year 2013 when the new incumbent took over as Chairman of the NHAI ignoring the fact that the Independent Engineer in terms ofthe agreement had granted approval to the same way back on • 30.6.2010. In addition, the dispute regarding shifting of Toll B Plaza had already been settled by the High Court when it permitted the appellant to shift the Toll Plaza to KMs 110 against which NHAI did not file any appeal challenging the order of the High Court. Thus, in spite of the fact that the dispute c regarding shifting of toll plaza had attained finality by virtue of a series of judicial verdict, the newly appointed Chairman, NHAI for the first time in 2013 restrained the appellant-company from shifting the Toll Plaza to KMs 110 and this·clearly resulted into putting the entire project to a standstill since the project was to be financed by way of Build, Operate, Trade mode (BOT o mode) and affected financing of the project and the matter got enmeshed into a series of litigations related hereinbefore. But the High Court refused to go into this dispute stating that it does not want to go into the terms and concjitions of the contract and directed for undertaking from the appellant attributing the E entire delay to the appellant-company for non performance and finally terminated the contract when it directed the respondent NHAI to take back the project from the appellant. Assuming the High Court did it in public interest to expedite the construction of the highway, it is more than obvious that this F · direction of the High Court cannot possibly and practically expedite the construction as admittedly the NHAI itself do not undertake any construction work of the highway which clearly implies that it will have to issue a fresh tender for construction of the balance area of the project which is bound to result into G greater delay of the project apart from the fact that the dispute between the appellant-company and the NHAI would still survive and finally a 3rd party being a new player is bound to get entangled giving rise to further legal complications in the whole process. H

674 SUPREME COURT REPORTS [2014] 14 S.C.R.

65Copy pinpoint65. In addition to this it is difficult to overlook that the High Court was merely seized with the limited issue in the , pending PIL as to whether the Show Cause Notice issued by the NHAI to the appellant-company which was ordered to be ,kept in abeyance by order of ihe High Court itself; was fit to be vacated on an application filed by the respondent NHAI, but while doing so the High Court took a leap much way ahead by cancelling the agreement itself for non performance ignoring the main issue as to whether the Show Cause Notice issued by the NHAI was fit to be sustained or the order keeping it in abeyance was fit to be vacated and straightway concluded that the appellant-company had delayed the project completely overlooking that the contractual violation had been done by the NHAI when it declined to permit shifting of the Toll Plaza from KMs 146 to KM 110 in spite of.the reasoned orders of o the High Court to that effect against which no appeal was filed either by the NHAI or the PIL petitioner or any other concerned party. It is no doubt true that-in a public interest litigation the court at times may forego/overlook the technicalities coming in the way of issuan.ce of any direction which may conflict or jeopardise the public ·interest. But the same cannot be allowed to reach to the extent or affect the contractual agreement itself which reduces a valid and a legal document into a worthless piece of paper or a waste paper which clearly means that the relationship between the parties although were to be governed and supported by a valid legal document, the same would finally turn out to be a document having no legal significance in spite of its validity in the eye of law. If this were to be permitted, it is bound to lead to a chaotic situation affecting the very fabric of fhe rule of law which cannot be allowed to prevail over a valid and legally supported document conferring certain rights on the person or entity possessing it. 66.As a consequence and fall out of the above position, we deem it just and appropriate to set aside the impugned directions of the High Court, and permit the appellant to restore the construction of the balance stretch/area of the

MIS. SOMAISOLUX NH ONE TOLLWAY PVT LTD. v 675 HARISH KUMAR PURI [GYAN SUDHAMISRA, J.]

highway project by further directing the NHAI to permit the appellant to shift the Toll Plaza from KM 146 to any point between KMs 11 Oand KMs 117 with concurrence of the NHAI. The exact point of construction of Toll Plaza between KMs 110 to KMs 117 shall thus be decided by the NHAI holding mutual consultation with the appellant/concessionaire in the light of the approval already granted by the Independent Engineer in terms of the Agreement which also had been approved by the High Court earlier. However, we take note of the fact that the High Court although by its order referred to hereinbefore permitted shifting of the Toll Plaza in dispute to c point KM 110, we have noticed that the distance between KMs 96 where Toll Plaza of L & T is existing and the proposed toll plaza at KMs 110 would be at a distance of only 14 KMs which may not be in the interest of the commuting public-and, therefore, we direct that the shifting although may not be o permitted at KMs 110, it may be allowed to be shifted at any point between KMs 110 and KMs 117 in consultation and with concurrence of the NHAI. In fact, we could have directed the appellant to shift the Toll Plaza even beyond 117, KMs but we have been informed that beyond KM 117 the area is thickly populated and would not be practically possible to set up the Toll Plaza beyond KMs 117.

67Copy pinpoint67. Therefore, and in order to facilitate and expedite completion of the Highway Project, we direct the respondent NHAI to permit shifting of Toll Plaza from 146 to anywhere between KMs 110 and KMs 117 expeditiously but not later than a period of two months from the date of this order during which period the required legal formality of notifying the area for construction of the Toll Plaza shall also be complied with by the NHAI by getting it notified through the Competent Authority G and making the land available free from all encumbrance. The appellant thereafter shall forthwith restart the construction including setting up of Toll Plaza at the agreed point and continue with construction of the remaining area of the Highway Project and shall complete the entire construction of the H

676 SUPREME COURT REPORTS [2014] 14 S.C.R.

A Highway on or before 31 51 of March 2015 failing which the appellant/concessionaire company shall be liable for penal consequences to be determined by the NHAI in terms of the Concession Agreement.

68Copy pinpoint68. The appellant/concessionaire company is further B directed to report/update the progress/development of the construction to the NHAI referred to in the Concession Agreement after every three months from the date of compliance of the required statutory. notification for shifting of Toll Plaza atthe instance of the NHAI and the Ministry of C Road Transport and Highways/any other competent authority. However, we make it explicitly clear that no dispute shall be allowed to be raised further by any of the parties before any court which may impede or slow down the progress of completion of the Highway Project as this measure most certainly would not be in the interest of the Highway Project and consequently not in public interest in any manner. However, the main contesting parties i.e. the appellant-Concessionaire Company and the NHAI would be at libertytO seek such other orfurther direction from this Court in case there is bona fide need to resort to such an eventuality in regard to the Highway Project referred to in the Agreement. The appeal accordingly is allowed but in the circumstances leave the parties to bear · the costs on their own.

Rajendra Prasad Appeal allowed.