LexM/S. MSK PROJECTS (I) (JV) LTD versus STATE OF RAJASTHAN & ANR.
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[2011] 9 S.C.R. 402 A MIS. MSK PROJECTS (I) (JV) LTD ~ v. STATE OF RAJASTHAN & ANR. (Civil Appeal No. 5416 of 2011) B JULY 21, 2011 I ' [P. SATHASIVAM AND DR. B.S. CHAUHAN, JJ.] Contract: c Construction of a bypass road - Concession agreement authorising contractor to collect toll fee - Dispute between parties as to delay in issuance of notification by State Government barring the use of old route as also entitlement of contactor to collect toll fee from vehicles using a specific D patch of the road - Arbitral tribunal holding that there had .. been delay on the part of the State in issuing the notification and the State failed to implement the same and the contractor was entitled to collect fee even from vehicles using the specific patch of the road - District Judge and High Court E holding that there was no clause in the agreement to issue notification barring the old route - However, the High Court held that the contractor could collect toll fee from the specific patch of the road - HELD: The State Government had not taken the defence that it was not agreed between the parties F to issue the notification barring the traffic through the old route - The only issue remained as to whether there was delay in issuance of notification and implementation thereof - In such a fact-situation, the District Judge as well as the High Court fell in error in considering the issue which was not taken by G the State before the arbitral tribunal during the arbitration proceedings and holding that there was no agreement for issuance of notification by State barring the old route - The issue as to whether the specific patch of the road was an integral or composite part of the project and the contractor could collect the toll fee on that part also stands concluded H 402 MSK PROJECTS (I) (JV) LTD v. STATE OF 403 RAJASTHAN & ANR. ~· by the High Court and stands settled in favour of the contractor A - Rajasthan Motor Vehicles Taxation (Amendment) Act, 1994 - Tolls Act, 1851. Tolls Act, 1851: '; • 8 Toll fee - Nature of - Construction of a bypass road - Concession agreement authorising the contractor to collect toll fee - Dispute between parties - Arbitration - HELD: Toll fee is compensatory in nature wherein the Government can reimburse itself the amount which it had spent on construction of road/bridge etc. - State is competent to levy/collect the toll c fee only for the period stipulated under the Statute or till the actual cost of the project with interest etc. is recovered - It cannot be a source of revenue for the State - A person is ... debarred by law and statutory inhibition, as contained in Clause IV(a) of the notification, from collection of toll beyond D the recovery of cost of construction - In the instant case, the work was to be executed in two phases - The first phase was completed and the amount spent by contractor on the said work was recovered with certain profit - The work of second phase was never executed - Therefore, contractor cannot be E permitted to claim damages/compensation on this count - The arbitrator cannot proceed beyond the terms of reference and, therefore, the question of considering the non-execution of the work of second phase was neither permissible nor possible as it had arisen subsequent to the date of aw_ard. in F the arbitration proceedings - In order to do complete Justice between the parties and protect the public exchequer, matter remitted to arbitral tribunal to work out the entitlement of the contractor - Arbitration and Conciliation Act, 1996 - Code of , !., Civil Procedure, 1908 - 0.8, r.5. G Arbitration: Jurisdiction of arbitratorlarbitral tribunal - HELD: Special tribunals like arbitral tribunals and Labour Courts get jurisdiction to proceed with the case only from the reference H 404 SUPREME COURT REPORTS [2011] 9 S.C.R. A made to them - Thus, an arbitrator cannot be allowed to ~ B assume jurisdiction over a question which has not been referred to him. Similarly, he cannot widen his jurisdiction by holding contrary to the fact that the matter which he wants to decide is within the submission of the parties in the case. Interest - HELD: While award of interest for the period prior to an arbitrator entering upon the reference is a matter of substantive law, the grant of interest for the post-award period is a matter of procedure - Therefore, the arbitrator is competent to award interest fo
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