South Delhi Municipal Corporation vs MEP Infrastructure Developers Ltd

,,,,

Talwant Singh, J",,,,

The present matter has been taken up for hearing by way of Video Conferencing on account of COVID-19 pandemic.,,,,

By this common order, we are adjudicating LPA No. 165/2020 titled as South Delhi Municipal Corporation v. MEP Infrastructure Developers Ltd. and LPA No.167/2020 titled as MEP",,,,

Infrastructure Developers Ltd. v. South Delhi Municipal Corporation as both of them have, in sum and substance, challenged the order dated 12.06.2020 passed by learned Single Judge in",,,,

W.P.C. No.2241/2020 and order passed on 24.06.2020 in review petition No.107/2020. By order dated 12.06.2020, the learned Single Judge had taken up for hearing C.M.No.11093/2020 moved",,,,

by MEP Infrastructure Developers Ltd. (hereinafter referred to as “MEPâ€) for modification of order dated 02.03.2020 alongwith other miscellaneous applications to place additional facts on,,,,

record, amendment of writ petition and for extension of effective date of termination of the contract and for hearing W.P.C. No. 2241/2020 and W.P.C. No.370/2020 together as well as an",,,,

application moved by South Delhi Municipal Corporation (hereinafter referred to as “SDMCâ€) seeking dismissal of the writ petition. However, no order was passed in C.M.No.11397/2020",,,,

filed by SDMC for dismissal of the writ petition and the same was adjourned till the next date.,,,,

The writ petition No.2241/2020 was filed mainly challenging an order dated 31.01.2020 passed by Commissioner of SDMC and a subsequent notice of termination of the contract dated,,,,

14.02.2020 served upon MEP. During the pendency of the writ petition, an amendment application was moved and said application was allowed by learned Single Judge. Now the writ petition",,,,

No.2241/2020 has enlarged reliefs as under:,,,,

“a. Issue of a writ of mandamus or any other appropriate writ and appoint an independent Adjudicator to adjudicate the claims of the petitioner.,,,,

b. Issue a declaratory writ to the effect that clause 16 of the agreement which provides for adjudication mechanism has been left unworkable on account of actions and inactions of,,,,

the SDMC Commissioner;,,,,

c. Issue a writ of certiorari and quash the order dated 31.01.2020 passed by the Commissioner SDMC;,,,,

d. Quash the Impugned Notice dated 14.02.2020 issues consequent to the Impugned Order;,,,,

e. During the pendency of the writ petition, stay the Impugned Notice dated 14.02.2020;",,,,

f. Issuance a suitable writ, order and direction declaring that in the guise of section 113 (2) (g) of the Delhi Municipal Corporation Act, 1957 the petitioner cannot be compelled to",,,,

pay to the respondent no. 1 more than the actual collected towards toll tax from commercial vehicles entering the NCT, Delhi;",,,,

g. issue a writ in the nature of mandamus directing the respondents to make a fresh assessment as to the circumstances affecting toll collection taking into account the circumstances,,,,

highlighted by the petitioner and reassess and re-determine the annual weekly amount payable by the petitioner to the SDMC towards toll tax;,,,,

h. Issue a writ in the nature of mandamus directing the respondents to take into consideration the change in circumstances make suitable downward revision in the weekly/annual,,,,

remittance commensurate with the reduction in toll tax paying commercial vehicles and taking into account the tax leakage on account of free lanes;,,,,

i. Issue a writ in the nature of certiorari quashing the demand of .1% per that that is 36.5% per annum in the demand letter dated 18.11.2019 as being in terrorem and inequitable;,,,,

iA. Be pleased to quash the letter of termination dated 16.03.2020 issued by the respondent to the petitioner;,,,,

iB. Be pleased to quash the NIT dated 28.04.2020 issue by the respondent consequent to the notice of termination 16.03.2020;,,,,

iC. During the pendency of this writ petition, pass an interim order directing the respondent to keep in abeyance the Termination Notice dated 16.03.2020 as well as NIT dated",,,,

28.04.2020 for fresh bidding for collection of tax, till the final disposal of the instant writ petition;",,,,

j. To issue a Writ order or direction in the nature of CERTIORARI and quash the Termination Notice dated 16.03.2020 and subsequent extension of termination dated issued by the,,,,

respondent as being illegal;,,,,

k. To issue a writ order or direction in the nature of CERTIORARI and quash the NIT dated 27.04.2020 issued by the Respondent consequent to the notice of termination dated,,,,

16.03.2020;,,,,

l. During the pendency of this writ petition, pass ad interim order direction the respondent to keep in abeyance the Termination Notice dated 16.03.2020 and subsequent extension",,,,

of termination date as well as NIT dated 27.04.2020 for fresh bidding for collection of tax, till the final disposal of the instant writ petition;",,,,

m. Direct that the money appropriated by the Respondent by way of encashment of bank guarantee for Rs.64 crore, will be held by the respondent as a security deposit after",,,,

adjusting therefrom the amount payable by the petitioner towards ECC;,,,,

n. Pass such other order/orders as this hon’ble court may deem fit and proper in the facts and circumstances of this case.â€​,,,,

If we go little back in history, the SDMC had issued an NIT and had called for tenders for collection of the entry tax/toll tax in Delhi in the year 2017 and the contract was awarded to MEP",,,,

and since then MEP is managing about 124 Toll Plazas, which have been established on all the roads through which one can enter the National Capital Territory of Delhi. It is pertinent to",,,,

mention here that apart from collection of the toll, MEP is also authorized to collect ECC i.e. Environment Compensation Cess, which is imposed upon certain type of vehicles entering Delhi as",,,,

per direction of Hon’ble Supreme Court. The amount of ECC is not part of the contract and it is to be collected and handed over by MEP to Government over and above the contract,,,,

amount. The terms on which the contract was awarded to MEP by SDMC vide agreement dated 28.09.2017 was that MEP had agreed to pay cumulative and lump sum weekly remittance of,,,,

Rs.23.13 crores, totaling to Rs.1,206 crores per annum for two years with effect from 01.10.2017 and thereafter to enhance the weekly amount to Rs.24.29 crores, i.e., Rs.1,266 crores per",,,,

annum with effect from 01.10.2019 after giving effect to 5% enhancement. The safeguards for due performance of the contract, by way of submission of bank guarantees etc., were also taken.",,,,

As per SDMC, when certain violations were committed by the MEP, it sent a demand notice dated 18.11.2019 by which MEP was required to pay a sum of Rs.450.69 crores as dues besides",,,,

penalty @ 0.1 % per day. This demand notice was challenged by MEP by filing a writ petition bearing No.12483/2019, in which an order was passed on 26.11.2019 by learned Single Judge",,,,

reducing the weekly commitments of MEP for the time being to Rs.20.00 crores per week and SDMC was directed to pass a fresh order giving reasons. The order dated 26.11.2019 in,,,,

W.P.C.No.12483/2019 is reproduced as under:,,,,

W.P.(C) 12483/2019 and CM APPL. No.50933/2019,,,,

This writ petition is filed seeking the following reliefs:,,,,

“a. Issuance a suitable writ, order and direction declaring that in the guise of section 113 (2) (g) of the Delhi Municipal Corporation Act, 1957 the petitioner cannot be",,,,

compelled to pay to the respondent no. l more than the actual amount collected towards toll tax from commercial vehicles entering the NCT, Delhi;",,,,

b. Issue a writ in the nature of declaration, declaring that the Toll Tax & ECC Agreement is ultra vires Section 113 (2) (g) of the Delhi Municipal Corporation Act, 1957 to the extent",,,,

it contemplates payment of amount by the petitioner to the respondent no. l in excess of the toll tax actually collected by the petitioner;,,,,

c. Issue a writ in the nature of mandamus directing the respondents to make a fresh assessment as to the circumstances affecting toll collection taking into account the circumstances,,,,

highlighted by the petitioner and reassess and re-determine the annual/weekly amount payable by the petitioner to the SDMC towards toll tax;,,,,

d. Issue a writ in the nature of mandamus directing the respondents to take into consideration the change in circumstances make suitable downward revision in the weekly/ annual,,,,

remittance commensurate with the reduction in toll tax paying commercial vehicles and taking into account the tax leakages on account of free lanes;,,,,

e. Issue a writ in the nature of certiorari quashing the demand notice dated 18.11.2019 issued by the respondent to the petitioner for payment of Rs.450.6973 crores.,,,,

f. Issue a writ in the nature of certiorari quashing the demand of .1 % per day that is 36.5% per annum in the demand letter dated 18/11/2019 as being in terrorem and inequitable.,,,,

g. Issue a writ in the nature of Mandamus directing the SDMC to provide a suitable mechanism for resolution of disputes/grievances of the petitioner as the mechanism provided by,,,,

the contract has become unworkable.â€​,,,,

The case of the petitioner is that for the purpose of collecting Toll Tax, SDMC floated a tender on 21.07.2017 inviting bids from interested parties to collect Toll Tax and ECC",,,,

from specified commercial vehicles at 124 toll plaza/post/barriers location bordering Delhi.,,,,

The petitioners made a bid and were declared successful. An agreement was signed between the petitioner and respondent No. 2 on 28.09.2017. As per the agreed terms, the",,,,

petitioner agreed to pay to the respondent a sum of Rs. 23.12 crores per week being a total of Rs. 1206 crores per annum for the period of five years subject to enhancement of 5%,,,,

in the awarded amount after completion of every two years. Presently, it is stated that as per the agreement, the petitioner are obliged to pay Rs.24.28 crores per week.",,,,

The grievance of the petitioner is that the Eastern Peripheral Expressway was opened for general public traffic on 27.05.2018. On 16.01.2019, a meeting of a High Level",,,,

Committee of the respondent took place. In the said meeting, they deliberated that the traffic entering Delhi has reduced due to opening of the Eastern peripheral Expressway. It was",,,,

estimated in the meeting that was held on 31.08.2018 amongst SDMC, NHAI and the petitioner that on opening of the Eastern Peripheral Expressway there is a reduction of 30% in",,,,

the commercial traffic approximately and it would be higher on the completion of the Western Peripheral Expressway. The grievance of the petitioner is that at present weekly,,,,

expected revenue from 124 entry points is only Rs.19.25 crores taking into consideration all other aspects. On the annual basis collection of amounts calculated on the basis of,,,,

survey report is approximately Rs.1000 crores which is far below the awarded contract of Rs.1206 crores per annum.,,,,

It is the case of the petitioner that they have been regularly sending representations to the respondent with regard to decline in toll revenue due to diversion of traffic from,,,,

01.06.2018. On the representation of the petitioner, a High-Level Committee was constituted to look into all the aforesaid claims as raised by the petitioner. The committee on",,,,

17.10.2019 is said to have made a recommendation and approved that a sum of Rs. 18,98,54,798/- be reduced from the outstanding claim made by the respondent of",,,,

Rs.446,46,55,359/-.",,,,

On 18.11.2019, the respondent has issued a demand notice to the petitioner asking them to deposit a sum of Rs. 450. 69 crores and the penalty amount of .1% per day i.e. 36.5%",,,,

per annum within a period of seven days failing which action shall be taken for revocation of the bank guarantee and post-dated cheques.,,,,

Learned senior counsel for the petitioner has vehemently urged as follows:,,,,

(i) He has urged that as is apparent from the minutes of the meeting noted above, there has been a reduction of at least 30% in the traffic on the opening of the Eastern peripheral",,,,

Expressway. This has further reduced on the opening of the Western Peripheral Expressway. Hence, he submits that the petitioner cannot be made to pay toll tax which they have",,,,

not been collecting and will not be able to collect given the volume of traffic that is passing through various toll booths.,,,,

(ii) It is further pleaded that on 04.06.2018, a direction was issued by the respondent not to collect toll tax and ECC from other than the allotted six lanes. It is stated that this itself is",,,,

causing a loss of Rs.36.81 lakhs per day.,,,,

(iii) It is further pleaded that Clause 16 of the agreement between the parties stipulates a dispute resolution clause. Under the said clause, in case any disputes are stated, decision",,,,

has to be given by a competent officer in connection with or arising out of the agreement. If the competent officer fails to give his instructions or decision in writing or if the,,,,

contractor is dissatisfied with the instructions of the competent officer, an appeal to the Commissioner, SDMC shall lie who shall give an opportunity to the contractor to be heard, if",,,,

the later so desires. The Commissioner, SDMC shall give his decision in writing within 30 days on receipt of the contractor’s appeal. It further pleaded that the respondent",,,,

before raising a demand of Rs. 450 crores ought to have followed the principles of natural justice.,,,,

Learned senior counsel for the respondent has pleaded as follows:,,,,

(i) He submits that the floor price of the bid was Rs.636 crores but the petitioner themselves made a bid of Rs. 1206 crores per annum. The second highest bid was of the bidder,,,,

whose bid was at Rs. 811 crores. Meaning thereby, the petitioner themselves had made a much higher bid in an effort to grab the contract in question.",,,,

(ii) He further submits that in case toll tax is collected is higher than the petitioner’s bid offer, the balance would be retained by the petitioner with themselves and would not be",,,,

handed over to the respondent. Hence, he states that it was for the petitioner to have properly judged the possible revenue collection and made a bid accordingly.",,,,

(iii) He further states that presently, a total amount of Rs.450 crores is outstanding whereas the respondent have only a bank guarantee of Rs. 64 crores and some post-dated",,,,

cheques as a security.,,,,

Given the nature of submissions made, this writ petition can be disposed of at this stage.",,,,

I may note that the dispute resolution clause in the agreement between the parties reads as follows:,,,,

“16. Dispute Resolution Clause:,,,,

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.",,,,

2 In the event the Contractor consider any work demanded of it as being outside the requirement 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 1 in respect of the same. Thereupon, the competent Officer shall give his written instruction or decision within a period of (30) days for the receipt",,,,

of the Contractor's Letter.,,,,

16.3 If the Competent Officer fails to give his instructions or decision in writing within the aforesaid period or if the Contractor is dissatisfied with the instructions or decision of the,,,,

Competent Officer, the Contractor may, within (15) days of receipt of Competent Officer's instruction or decision, appeal to the Commissioner, SDMC who shall afford an",,,,

opportunity to the Contractor to be heard, if the later so desires, and to offer evidence in support of its appeal. The Commissioner, SDMC shall give his decision in writing within",,,,

(30) days of receipt of Contractor's appeal which shall be acceptable to the Contractor.â€​,,,,

It is manifest from the above that a procedure has been incorporated in the Agreement whereby in case any contractor, namely, the petitioner has any dispute or any grievance,",,,,

he can approach a competent officer/the Commissioner, SDMC who has to after giving a hearing pass a reasoned order.",,,,

In my opinion, it would be in the interest of justice that before the W.P. (C) 12483/2019 Page 7 of 10 respondent enforces their demand as now claimed by demand dated",,,,

18.11.2019, first they should give a hearing to the petitioner and thereafter taking into account the submissions of the petitioner pass an appropriate reasoned order.",,,,

Reference may be had to the judgment of the Supreme Court in the case of Swadeshi Cotton Mills vs. Union of India, (1981) 1 SCC 664 where the court held as follows:",,,,

“32. The maxim audi alteram partem has many facets. Two of them are: (a) notice of the case to be met; and (b) opportunity to explain. This rule is universally respected and duty,,,,

to afford a fair hearing in Lord Lore-burn's oft quoted language, is “a duty lying upon everyone who decides somethingâ€, in the exercise of legal power. The rule cannot be",,,,

sacrificed at the altar of administrative convenience or celerity; for, “convenience and justice†â€" as Lord Atkin felicitously put it â€" “are often not on speaking terms",,,,

[General Medical Council v. Spackman, 1943 AC 627, 638]â€​.",,,,

xxxxx,,,,

The further question to be considered is: What is the effect of the non-observance of this fundamental principle of fair play? Does the non-observance of the audi alteram,,,,

partem rule, which in the quest of justice under the rule of law, has been considered universally and most spontaneously acceptable principle, render an",,,,

administrative decision having civil consequences, void or voidable? In England, the outfall from the watershed decision, Ridge v. Baldwin [1964 AC 40: (1963) 2 All ER 66 (HL)]",,,,

brought with it a rash of conflicting opinion on this point. The majority of the House of Lords in Ridge v. Baldwin [(1978) 1 SCC 248] held that the nonobservance of this principle,",,,,

had rendered the dismissal of the Chief Constable void. The rationale of the majority view is that where there is a duty to act fairly, just like the duty to act reasonably, it has to be",,,,

enforced as an implied statutory requirement, so that failure to observe it means that the administrative act or decision was outside the statutory power, unjustified by law, and",,,,

therefore ultra vires and void (see Wade's Administrative Law, ibid., p. 448). In India, this Court has consistently taken the view that a quasi-judicial or administrative decision",,,,

rendered in violation of the audi alteram partem rule, wherever it can be read as an implied requirement of the law, is null and void (e.g. Maneka Gandhi case [1964 AC 40 :",,,,

(1963) 2 All ER 66 (HL)] and S.L. Kapoor v. Jagmohan [(1970) 2 WLR 1009: (1970) 2 All ER 528 (CA)]. In the facts and circumstances of the instant ease, there has been a",,,,

noncompliance with such implied requirement of the audi alteram partem rule of natural justice at the pre-decisional stage. The impugned order therefore, could be struck down as",,,,

invalid on that score alone. But we refrain from doing so, because the learned Solicitor-General in all fairness, has both orally and in his written submissions dated August 28,",,,,

1979, committed himself to the position that under Section 18-F, the Central Government in exercise of its curial functions, is bound to give the affected owner of the undertaking",,,,

taken-over, a “full and effective hearing on all aspects touching the validity and/or correctness of the order and/or action/of takeoverâ€, within a reasonable time after the",,,,

takeover. The learned Solicitor-General has assured the court that such a hearing will be afforded to the appellant Company if it approaches the Central Government for,,,,

cancellation of the impugned order. It is pointed out that this was the conceded position in the High Court that the aggrieved owner of the undertaking had a right to such a,,,,

hearing.â€​,,,,

Given the terms of the contract as noted above i.e. Clause 16 and the legal position regarding compliance of the principles of natural justice, it is appropriate that the",,,,

respondent give a proper hearing to the petitioner and thereafter pass a reasoned order. In the interest of justice, I pass the following directions:",,,,

(i) Present writ petition would be treated as a representation of the petitioner to the Commissioner, SDMC.",,,,

(ii) He may give a hearing to the petitioner within four weeks from today. If the Commissioner so desires, he may nominate a retired judge of this court for the necessary hearing",,,,

and passing of a reasoned order.,,,,

(iii) The Commissioner/Nominee of the Commissioner would thereafter pass a reasoned order. This exercise may be done within two months from today.,,,,

(iv) The Commissioner/nominee of the Commissioner is requested to pass a reasoned order uninfluenced by any observations that have been made by this court while passing this,,,,

order. Once the order is passed, the respondent is free to take steps as per law. Needless to add, in case the petitioner are not satisfied with the said order, they are at liberty to take",,,,

steps to challenge the same as per law.,,,,

(v) In the meantime, the petitioner shall continue to pay a sum of Rs.20crores per week starting from the current week. In case there are two consecutive defaults in making payment,",,,,

the right of the petitioner to a hearing and reasoned order shall stand superseded.,,,,

(vi) Demand notice dated 18.11.2019 is kept in abeyance subject to speaking order passed by the Commissioner/Nominee of the Commissioner.,,,,

It has been pointed out that certain post-dated cheques that were given by the petitioner are expiring in the next two months. The petitioner will ensure that fresh post-dated,,,,

cheques are given to the respondent with the same validity as was given earlier.,,,,

This order has been passed without prejudice to the rights and contentions of the parties.,,,,

With the above, the present petition stands disposed of. Pending application also stands disposed of.â€​",,,,

In compliance to directions in the above order, a detailed order was passed by Commissioner, SDMC on 31.01.2020 by which certain claims of MEP were partially allowed and rest of the",,,,

claims of MEP were rejected. In terms of the order dated 31.01.2020, SDMC issued a demand notice for Rs.592.67 crores alongwith penalty @ 0.1%, being Rs.163.90 crores. By way of writ",,,,

petition No.2241/2020, the order dated 31.01.2020 passed by Commissioner of SDMC and the demand notice dated 14.02.2020 were challenged. While hearing the interim prayers of the MEP,",,,,

i.e., the petitioner, the learned Single Judge was pleased to pass an order dated 02.03.2020, which is reproduced hereunder:",,,,

“W.P.(C) 2241/2020 & CM APPL. No.7822/2020,,,,

Issue notice. Learned counsel for respondent accepts notice.,,,,

This Writ Petition is filed seeking to impugn the speaking order passed dated 31.1.2020 and Demand Notice dated 14.2.2020 issued pursuant to a hearing given as directed by,,,,

this court in its order dated 26.11.2019.,,,,

Learned senior counsel for the petitioner has raised various submissions to plead as to why the impugned order has been wrongly passed. He further submits that the connected,,,,

matter being W.P.(C)570/2020 is coming up on 6.3.2020.,,,,

Learned senior counsel appearing for the respondent has pointed out that there has not been proper compliance of the order of this court dated 26.11.2019 inasmuch as the,,,,

petitioners have defaulted in making payment of (a) Rs.20 crores per week as stated by this court; (b) have not given fresh Post-Dated Cheques as was directed by this court.,,,,

Counter-Affidavit be filed within one week. Rejoinder thereto, be filed within one week thereafter. In the meantime, petitioner will deposit all arrears, as directed by this court in",,,,

its order dated 26.11.2019, which as per the respondent is Rs.115.04 crores in three equal monthly instalments without prejudice to their rights and contentions. First instalment will",,,,

be payable within 15 days from today. He will also continue to pay Rs.20 crore per week as stated in the earlier order dated 26.11.2019. They will also ensure compliance of the,,,,

order of this court dated 26.11.2019 regarding issue of fresh Post-Dated Cheques.,,,,

Subject to compliance of these directions, no coercive steps may be taken against the petitioner, till the next date of hearing.",,,,

List on 31.3.2020 at 2:15 PM.,,,,

Needless to add, in case the payment of Rs.20 crore per week in future is defaulted or any other default takes place as stated above, the interim order passed shall automatically",,,,

stand vacated.,,,,

In the meantime the respondent will take instructions as to whether the matter can be referred to a Retired Judge of this court as a Sole Arbitrator to be nominated by the,,,,

respondent.,,,,

A copy of this order be given dasti under signatures of the Court Master to learned counsel for the parties.â€​,,,,

Being not satisfied with the order dated 02.03.2020, MEP moved C.M.No.11093/2020 for modification of order dated 02.03.2020 and vide impugned order dated 12.06.2020, the learned Single",,,,

Judge was pleased to modify the order dated 02.03.2020. The relevant portion of the said order is reproduced hereunder:,,,,

“23. Both the notifications refer to suspension of continuous obligation between the parties w.e.f. 19.02.2020. The petitioner had, in the first instance, invoked the said force",,,,

majeure clause on 19.03.2020, therefore, at least till the said date it was not effected apropos the operation of the toll collections. The nation-wide lockdown was announced on",,,,

24.03.2020 to be effective from the next day. The force majeure period has not abated as per any government notification; free movement of traffic is being regulated even now at,,,,

borders between the States. Evidently, the full operability of the contract is hindered by orders of the National and the State governments i.e. by circumstances beyond the control of",,,,

the petitioner.,,,,

In Halliburton Offshores (supra) the essence of the dicta of the Supreme Court in Energy Watchdog (supra) regarding force majeure has been summarized as under:,,,,

“….. 56. It is under this factual backdrop that the ground of Force Majeure taken in March, 2020 would have to be adjudged. The grounds taken to invoke the Force Majeure",,,,

clause are that due to outbreak of COVID-19 experts from France who may be required cannot travel to India. Since the Force Majeure clause in the contract covers epidemics and,,,,

pandemics, the Contractor claims that its non-performance is justified and the invocation of Bank Guarantees is liable to be stayed. There is no doubt that COVID-19 is a Force",,,,

Majeure event. But was this event the cause of the non-performance?,,,,

The law relating to Force Majeure has been recently settled by the Supreme Court in the case of Energy Watchdog v. Central Electricity Regulatory Commission, (2017) 14 SCC",,,,

The principles laid down by the Supreme Court in paragraphs 34-42 are as under:,,,,

a) Force Majeure would operate as part of a contract as a contingency under section 32 of the Indian Contract Act 1872 (`ICAâ€​).,,,,

b) Independent of the contract sometimes, the doctrine of frustration could be invoked by a party as per Section 56, ICA.",,,,

c) The impossibility of performance under Section 56, ICA would include impracticability or uselessness keeping in mind the object of the contract.]",,,,

d) If an untoward event or change of circumstance totally upsets the very foundation upon which the parties entered their agreement it can be said that the promisor finds it,,,,

impossible to do the act which he had promised to do.,,,,

e) Express terms of a contract cannot be ignored on a vague plea of equity.,,,,

f) Risks associated with a contract would have to be borne by the parties.,,,,

g) Performance is not discharged simply if it becomes onerous between the parties.,,,,

h) Alteration of circumstances does not lead to frustration of a contract.,,,,

i) Courts cannot generally absolve performance of a contract either because it has become onerous or due to an unforeseen turn of events. Doctrine of frustration has to be applied,,,,

narrowly.,,,,

j) A mere rise in cost or expense does not lead to frustration.,,,,

k) If there is an alternative mode of performance, the Force Majeure clause will not apply.",,,,

l) The terms of the contract, its matrix or context, the knowledge, expectation, assumptions and the nature of the supervening events have to be considered.",,,,

m) If the Contract inherently has risk associated with it, the doctrine of frustration is not to be likely invoked.",,,,

n) Unless there was a break in identity between the contract as envisioned originally and its performance in the altered circumstances, doctrine of frustration would not apply.",,,,

The principles as laid down in Energy Watchdog (supra) by the Supreme Court have to be applied to the facts of the present case in order to assess as to whether the,,,,

performance of the Contractor was prevented by the Force Majeure condition. Did COVID-19 prevent the Contractor from bringing the work on the three fields to completion and,,,,

conclusion?,,,,

If so, is the encashment of Bank Guarantees liable to be injuncted? …",,,,

….,,,,

The question as to whether COVID-19 would justify nonperformance or breach of a contract has to be examined on the facts and circumstances of each case. Every breach or,,,,

non-performance cannot be justified or excused merely on the invocation of COVID-19 as a Force Majeure condition. The Court would have to assess the conduct of the parties,,,,

prior to the outbreak, the deadlines that were imposed in the contract, the steps that were to be taken, the various compliances that were required to be made and only then assess as",,,,

to whether, genuinely, a party was prevented or is able to justify its nonperformance due to the epidemic/pandemic.",,,,

It is the settled position in law that a Force Majeure clause is to be interpreted narrowly and not broadly. Parties ought to be compelled to adhere to contractual terms and,,,,

conditions and excusing non-performance would be only in exceptional situations. As observed in Energy Watchdog (supra) it is not in the domain of Courts to absolve parties from,,,,

performing their part of the contract. It is also not the duty of Courts to provide a shelter for justifying non-performance. There has to be a “real reason†and a “real,,,,

justificationâ€​ which the Court would consider in order to invoke a Force Majeure clause…â€​,,,,

What is clear from the aforesaid is that in terms of the 2nd March order i) Rs.20 crores were payable per week, ii) the arrears of Rs.115.04 crores were payable in three equal",,,,

monthly instalments, the first instalment was to be paid in a fortnight i.e. on 17.03.2020 and iii) the petitioner was to issue fresh post-dated cheques in terms of the said order dated",,,,

26.11.2019. As a corollary to the said order, the first amount payable by the petitioner was Rs.20 crores as on 09.05.2020. Till 09.03.2020 the petitioner had paid Rs.12 crores into",,,,

the account of the respondent. There was a balance amount of Rs. 8 crores due on the said date. Ex facie, it could be construed as a breach of the said order. However, the order",,,,

has to be read in the context of the contract between the parties. There was a Bank Guarantee of an amount of Rs.64 crores with the respondent. This was a surety which the,,,,

respondent could have easily utilised whenever there was a shortfall in the promised payment by the petitioner. The dipping into the said cash fund by the Corporation is permissible,,,,

and is the prerogative of the Corporation. It is clearly envisaged between the parties, particularly in Clause 12(b) of the agreement/contract.",,,,

Apparently, the objective of the said Bank Guarantee was to remedy the petitioner’s defaults in payments, if any. The second amount of Rs.20 crores was due on 16.03.2019.",,,,

In effect the total amount payable to the respondent was Rs.78 crores, of which, the respondent had already received Rs.14.5 crores directly into its bank account from toll",,,,

collection and Rs. 64 crores in the form of Bank Guarantee, which it encashed later on. The encashment is only a ministerial act because the money was otherwise secured to it.",,,,

Evidently, the existence of the Bank Guarantee or its likely encashment in case of default in payment, was not argued when the 2nd March order was passed because there is no",,,,

reference in the order to the said facility of ready cash/monetary security to the Corporation. Had it been argued, the order would obviously have interpreted and noted the scheme",,,,

of payment as has been envisaged between the parties. Clause 12(b) is an integral part of the said agreement. Therefore, insofar as monies were secured to the respondent in the",,,,

form of Bank Guarantee, from which the respondent could have easily taken out the money on 09.03.2020 as well as on 16.03.2020, there cannot be a deemed default. In any case,",,,,

the Corporation encashed the BG and appropriated to itself the monies due as of 16th March. There was a default of Rs.20 crores by the petitioner the subsequent week on,,,,

24.03.2020. However, prior thereto a few instances occurred as noted hereinabove:",,,,

(i) The respondent Corporation itself referred to Circular dated 19.02.2020 issued by the Ministry of Road Transport Highways (MORTH) which notified that the COVID-19,,,,

pandemic was a force majeure occurrence. In effect, the force majeure clause under the agreement immediately becomes applicable and the notice for the same would not be",,,,

necessary. That being the position, a strict timeline under the agreement would be put in abeyance as the ground realities had substantially altered and performance of the contract",,,,

would not be feasible till restoration of the pre force majeure conditions.,,,,

(ii) A Full Bench of this Court by order dated 25.03.2020 has ordered that interim orders obtaining as on 16.03.2020 would continue till 15.05.2020, which has subsequently been",,,,

extended. In the interim, on 16.03.2020 the respondent cancelled the agreement with the petitioner, on grounds of what it perceived as a clear breach of the orders of this Court",,,,

dated 02.03.2020.,,,,

De hors the merits of the Corporation’s contentions or justification, its impugned order dated 16.3.2020 was pre-mature at least by one day. It could not have been passed",,,,

till midnight of 16th March. Furthermore, the due amounts of Rs.78 crores as of the said date stood paid and/or secured in terms of the contract. The impugned order is therefore",,,,

non-est.,,,,

Once the force majeure clause is acknowledged by the respondent as on 23.03.2020 in view of the public declaration of COVID-19 pandemic, the force majeure comes into",,,,

effect w.e.f. 19.02.2020 itself. This vital change in ground reality was not brought to the notice of the Court when the order dated 02.03.2020 was passed. Had it been known to the,,,,

court that the pandemic had been declared as force majeure by the Government of India the relevant clause 15(1) of the contract between the parties immediately gets operational,",,,,

which in effect means that the amount payable by the petitioner to the respondent would have to be put into abeyance i.e. the strict timelines would not be applicable.,,,,

The interim order of 2nd March subsumed the previous directions and claims or arrears. The arrears were quantified at Rs. 115.04 crores. This was payable prior to the ground,,,,

reality having being altered because of the global pandemic/nationwide lockdown or reduction of volume of traffic, as a consequence thereof. Therefore, the said amounts ought to",,,,

be paid as directed. The first instalment was payable on 17.03.2020 which was duly encashed through the Bank Guarantee and the second amount was payable on 02.04.2020 and,,,,

the third was on 02.05.2020. However, because of the interim orders the said amounts have not been paid to the Corporation. The balance amount of Rs.77.04 crores shall be made",,,,

available to the respondent within ten working days from the date of this order failing which the interim order shall stand vacated.,,,,

As regards the weekly payment of Rs.20 crores, the same would stand suspended in view of the force majeure clause. Nevertheless, the amounts collected by the petitioner shall",,,,

be deposited into the account of the respondent Corporation after deduction of 15% towards operation and maintenance charges, subject to final adjustments. The requisite post-",,,,

dated cheques shall be issued within two weeks.,,,,

In view of the above, CM No. 11093/2020 filed by petitioner for modification of the interim order dated 02.03.2020 is allowed and the order stands modified. Keeping in view",,,,

the reliefs already sought in the writ petition, the petitioner’s application being CM Nos. 11094/2020 & 11398/2020, seeking permission to place additional facts on record and",,,,

amendment applications are allowed. Amended petition be filed within two weeks from today, to which reply and rejoinder be filed in four successive weeks each. CM No.",,,,

11092/2020 is not on record. The Registry is directed now to show the same in the cause list. The respondent’s application being CM No. 11397/2020 for dismissal of the writ,,,,

petition is held over with till the next date. CM 11095/2020 and CM 11096/2020 stand disposed-offâ€​.,,,,

The MEP also filed a review petition No. 107/2020, which was disposed of on 24.06.2020 by learned Single Judge and relevant portion of the said order is reproduced hereunder:",,,,

“REVIEW PET. 107/2020,,,,

The hearing was conducted through video conferencing.,,,,

This Review Petition seeks modification of the order dated 12.06.2020 on the ground that there are two errors: (i) that once force majeure has been made applicable by the court,,,,

from 19.02.2020, then the Rs.20 crores weekly payment by the petitioner would stand suspended and as a corollary, the outstanding amount of Rs.115.04 crores, as recorded in this",,,,

Court’s order dated 02.03.2020, would be reduced by roughly Rs.38 crores (i.e. amount computed for 19th February to 2 nd March 2020 @Rs.20 crores per week) . It is",,,,

contended that Rs.115.04 crores as recorded, was the sum total of the earlier weekly payments, claimed as dues by the respondent Corporation. Thus, after deducting Rs.38 crores",,,,

from Rs.115.04 crores, only an amount of Rs.77 crores would be payable. Of this Rs.68.05 crores stand paid, leaving a payable balance of Rs.8.99 crores. It is contended that",,,,

nevertheless, the petitioner is ready and willing to pay the respondent a larger amount of Rs.15 crores by way of a Bank Draft, instead of the Rs.77.04 as directed by the order",,,,

dated 12.6.2020 and (ii) that once the force majeure clause was made applicable by MORTH from 19.02.2020, as recorded by this court, then that day becomes the cut-off date for",,,,

suspension of all subsequent contractual obligations.,,,,

The court, however, is not persuaded by either of the said contentions and does not find any error on the face of the record to review its order. Para 30 of the order clearly",,,,

reasons that the amount, which was admittedly agreed between the parties as payable as of 02.03.2020 was Rs.115.04 crores. No objection was raised by the petitioner apropos the",,,,

said quantum either at that stage or at any subsequent stage. An issue is being raised now only on the basis of this court’s order of 12.6.2020. Furthermore, the petitioner had",,,,

never contended at any earlier stage, of it being prejudiced by the force majeure condition from 19.2.2020 till 2.3.2020, as invoked by MORTH, or that its revenue/toll collection",,,,

had reduced in any manner during that period because of the force majeure condition. Indeed, the petitioner itself referred to the 19.2.2020 Circular of MORTH for the first time, a",,,,

full month later, on 19.3.2020. The national lockdown took effect from midnight of 24th/25th March, thereby virtually barring movement of motor vehicular traffic. It is only as a",,,,

result of this bar that the revenue collection of the petitioner could be said to have been affected. Resultantly, only the recurring weekly payment after 2nd March could be said to",,,,

be affected. The acknowledged outstanding amount of Rs.115.04 crores cannot be sought to be revised now, because it was not dependent on fresh revenue collection but were",,,,

dues of many weeks, prior to 2nd March. If the petitioner had an any reservation apropos the same i.e. such previous amount of Rs.115.04 crores, having already been affected by",,,,

force majeure disability, it could have brought the same to the notice of the court or expressed its inability to pay the same. The acknowledged dues of Rs.115.04 could have been a",,,,

subject matter of review on 2.3.2020 only if the petitioner had averred or shown that motor vehicular traffic between 19th February and 2nd March had already been affected on,,,,

date. Surely the petitioner would have known of the ground reality/toll collections/traffic volume, between 19.2.20 and 2.3.20. Therefore, for the petitioner to now submit that the",,,,

force majeure had affected its toll collection before 2nd March, is untenable. The order of 12.6.2020 is clear apropos the amount due before 2nd March and the recurring weekly",,,,

dues thereafter. It does not call for any review or modification.,,,,

The Court finds no merit in the review petition. It is, accordingly, dismissed.",,,,

The order be uploaded on the website forthwith. Copy of the order be also forwarded to the counsels through email. â€​,,,,

In the meantime, SDMC and others have challenged the order dated 12.06.2020 by filing LPA No. 165/2020 praying for setting aside the order dated 12.06.2020 and allowing",,,,

C.M.No.11397/2020 seeking dismissal of the writ petition. On the other hand, MEP has also filed an appeal bearing LPA No. 167/2020 challenging certain parts of order dated 12.06.2020 as",,,,

well as the order dated 24.06.2020 in review petition No. 107/2020. Notices were issued and extensive arguments have been heard in both the LPAs together. Certain interim directions were,,,,

also passed during pendency of the LPAs for ensuring interim compliance of order dated 12.06.2020 passed by the learned Single Judge. Written submissions have also been submitted on behalf,,,,

of both the parties along with bulky compilation of documents, submissions and the case laws etc. filed on behalf of them.",,,,

Ld. ASG Sh. Sanjay Jain, assisted by Ms. Garima Prashad, Standing Counsel for SDMC, has vehemently argued the appeal on behalf of the SDMC and he has stressed the following points:",,,,

(1) REPEATED VIOLATION OF ALL COURT ORDERS:,,,,

It has been submitted by Ld. ASG that the Ld. Single Judge has erred in granting relief to MEP, which has repeatedly violated each and every order passed by this Hon’ble Court. MEP",,,,

failed to comply with order dated 26.11.2019 in W.P.(C) No. 12483/2019 and orders dated 02.03.2020, 20.04.2020, 12.06.2020 in W.P.(C) No. 2241/2020. MEP even failed to comply with order",,,,

dated 20.03.2020 passed by this Hon’ble Division Bench in LPA 139/2020 & LPA 140/2020. It has also not deposited the ECC amounts in gross violation of orders dated 09.10.2015 &,,,,

16.12.2015 passed by Hon’ble Supreme Court.,,,,

(2) MEP ALLOWED TO WRIGGLE OUT OF ALL ITS CONTRACTUAL OBLIGATIONS IN PERPETUITY:,,,,

It has been submitted on behalf of SDMC that as per clause 1 of the Contract Agreement dated 28.09.2017, MEP has agreed to pay a cumulative and lump-sum weekly remittance of Rs.23.13",,,,

crores (which is Rs.1206 crores per annum) for two years w.e.f. 01.10.2017 and Rs. 24.29 crores (which is Rs.1206 crores per annum) w.e.f. 01.10.2019 after enhancement of 5% in the,,,,

awarded amount/ committed amount. As per SDMC, the Ld. Single Judge, while exercising Writ jurisdiction, has arbitrarily permitted the Contractor to wriggle out of all its past, present and",,,,

future contractual obligations in the name of COVID-19, without appreciating the past conduct of MEP. Judgment of Hon’ble Supreme Court in the case of Energy Watchdog vs. Central",,,,

Electricity Regulatory Commission, (2017) 14 SCC 80 has been relied, in which it is held that “Every breach or non-performance cannot be justified or excused merely on the invocation of",,,,

COVID-19 as a Force Majeure condition. The Court would have to assess the conduct of the parties prior to the outbreak.â€​,,,,

(3) PAST CONDUCT OF MEP PRIOR TO THE OUTBREAK OF COVID-19:,,,,

It has been the case of SDMC that even before the first lockdown took place from 25.03.2020, MEP was in default of toll tax dues of Rs.840.17 crores as per Agreement. The breach or non-",,,,

performance by MEP since October, 2017 cannot be justified or excused merely by invocation of COVID-19 as a Force Majeure event. The termination notice dated 16.03.2020 was issued by",,,,

SDMC considering the past conduct of the MEP and repeated violation of terms and conditions of contract agreement dated 28.09.2017 by MEP. The said company has neither paid Rs.24.29,,,,

crores per week as per contract nor paid Rs.20.00 crores per week in compliance of the Court orders dated 26.11.2019 and 02.03.2020. It has also violated other conditions imposed by Courts.,,,,

(4) NHAI FOUND MEP ILLEGALLY COLLECTING ENTRY TAX FROM FREE LANES:,,,,

As per SDMC, MEP has been misrepresenting that SDMC has restricted it to six lanes at NH8 and is not allowing it to collect Toll Tax from the free lanes. This is a totally false plea and",,,,

contrary to records. The true facts submitted by SDMC are as under:,,,,

(a) NHAI has provided only 6 Toll Lanes out of 16 Toll Lanes to SDMC for its Toll Collection under the directions of Hon’ble High Court of Delhi in OMP No. 171/2014 dated 26.02.2014.,,,,

(b) Therefore, the Agreement with MEP allowed it to collect toll tax only through the above 6 toll lanes located on extreme left side on Jaipur-Delhi bound carriageway. The remaining 10 lanes",,,,

were never available to SDMC to authorise collection of toll through its contractor. MEP was thus never authorized to collect Toll Tax from these 10 free lanes.,,,,

(c) However, MEP was authorised to collect penalty from the vehicles found evading toll tax by passing through the free lanes, and as per its own data, MEP has collected penalty amount of",,,,

Rs.138.15 crores from 01.10.2017 to 31.10.2019. SDMC has never restricted MEP from collecting penalty from the free lane violators.,,,,

(d) That a PIL No. 1238/2018 was filed in Delhi High Court alleging mismanagement of Toll Plazas. The Hon’ble Court directed NHAI to take remedial action. Thereafter, NHAI made",,,,

inquiries and found that there is gross mismanagement at the Toll Plazas due to illegal Entry Tax being collected from the free lanes beyond the authorized jurisdiction of SDMC. NHAI directed,,,,

SDMC as well as MEP vide letter dated 25.04.2018 to restrict collection of Toll through the earmarked 06 Toll lanes only. This letter has been challenged MEP before this Hon’ble Court in,,,,

W.P.(C) No. 570/2020.,,,,

Thus, MEP is trying to hide its own wrongs and is misleading the Court by making false statements only to avoid making payments as per terms of contract.",,,,

(5) MEP NOT ENTITLED TO ANY BENEFIT FROM OPENING OF WPE & EPE:,,,,

It is also case of SDMC that MEP has been misrepresenting that SDMC is not compensating for loss of traffic after opening of EPE (Eastern Periphery Expressway) and WPE (Western,,,,

Periphery Expressway). This is a totally false plea. To the contrary, this issue had been addressed during the pre-bid meeting prior to receipt of tender bid and therefore, the Clause of",,,,

“Surrender of Contract†was introduced in the Agreement dated 28.09.2017. Since the Agreement was on the basis of cumulative and lump-sum fixed weekly amount of Rs.23.13 crores,",,,,

irrespective of actual collection, SDMC would not be entitled to claim any further amount in case the Contractor’s collection increases. Also, in the same vein, SDMC would not compensate",,,,

the Contractor in case its collection decreases due to any reason whatsoever. MEP thus acknowledged that it will not seeks reduction in Contract Fee due to any reason whatsoever. Clause 3,,,,

(e) of the contract is as under:,,,,

“The Contractor agrees and confirms that it shall not be entitled to any compensation rebate or reduction in Toll Collection Contract Fee on account of change or variation in traffic pattern,",,,,

volume or intensity for any reason whatsoever other than as specifically permitted in accordance with this Agreement.â€​,,,,

(6) MEP IS DIRECTLY COLLECTING MORE THAN 50% OF TOTAL TOLL TAX REVENUE WHICH IT IS NOT DEPSITING. SDMC IS GETTING LESS THAN 50%,,,,

AND NOT 85%,,,,

As per SDMC, the MEP has been making false statements that since 23.03.2020 SDMC is getting more than 85% of toll tax amount directly from the RFID system installed at 13 entry points",,,,

which have a total traffic volume of around 85%. This is absolutely wrong and misleading statement. 85% Traffic Volume does not mean 85% revenue.,,,,

A study of the data of 2017-19 provided by MEP including statement of income, monthly passes and the income from penalty shows that less than 50% amount, out of total collection, directly",,,,

comes to SDMC.,,,,

(7) FALSE STATEMENTS BY MEP BEFORE COURT:,,,,

The Ld. ASG on behalf of SDMC stressed that MEP, through its senior counsels, has made several blatant false statements misrepresenting the facts before the learned Single Judge and",,,,

recorded in the impugned order dated 12.06.2020 in para 6, 8, 9 and 10, which are contrary to record and terms of the agreement. In fact, in para 6 of the impugned order it is recorded that",,,,

“Presently, the petitioner is paying approximately Rs.19.27 crores per week.†This is a blatantly false statement. The impugned order passed on the basis of such false and misleading",,,,

statements is wrong and deserves to be set aside.,,,,

(8) BREACH OF AGREEMENT BY MEP- Non-replenishment of performance Guarantee within 10 days:,,,,

Case of the SDMC is that the Ld. Single Judge has ignored breach of Clause 12.1 (a) (b) of the Agreement by MEP, which requires that once the Bank Guarantee has been encashed due to",,,,

default, the Performance Guarantee shall be replenished by the Contractor within 10 days from the date of such recovery, failing which the contract is liable to be terminated. The Bank",,,,

Guarantees were encashed by SDMC on 31.03.2020, 03.04.2020 and 07.04.2020 in view of repeated defaults. MEP did not replenish the Performance Guarantee worth Rs.64 crores within 10",,,,

days in breach of the contract. Thus, the finding of the Ld. Single Judge that since the Bank Guarantee was encashed later, there was no breach of order dated 02.03.2020 is erroneous and",,,,

deserves to be set aside.,,,,

(9) SDMC WAS BOUND BY ORDER DATED 02.03.2020 AND COULD NOT HAVE ENCASHED BANK GUARANTEE ON 09.03.2020:,,,,

It is further submitted on behalf of SDMC that the order dated 02.03.2020 had restrained it from taking any coercive steps against MEP which included encashment of BG. Accordingly, the",,,,

conclusion by Ld. Single Judge that “It was a ready fund to be dipped into and appropriated by the respondent, in case of default in payments†on 09.03.2020, thereby expecting SDMC to",,,,

violate the order dated 02.03.2020 and encash the BG on 9th March 2020, is a gravely wrong finding and deserves to be set aside. Significantly, it has been overlooked that a Bank Guarantee",,,,

could have been invoked only if there was a default of the contractual amount and not to prevent a default.,,,,

It is also submitted that MEP has itself admitted in its letter dated 19.03.2020 that it has not complied with order dated 02.03.2020. MEP admits in para 6 of the letter that the first compliance of,,,,

order dated 02.03.2020 was to be made on 09.03.2020 and it was not able to pay. It seeks application of Force Majeure on operation of order dated 02.03.2020. It is relevant to state that the,,,,

letter does not even mention O.M. dated 19.02.2020 issued by Ministry of Finance, Government of India.",,,,

(10) MEP IS NEITHER GIVING TRAFFIC DATA NOR DEPOSTING TOLL AMOUNT RECEIVED:,,,,

As per SDMC, MEP has deliberately not given data of “Average Weekly Traffic Count†since 01.11.2019 even though the same is specifically required under Clause 8.7 of the agreement.",,,,

In fact, since 23.03.2020, MEP has not deposited any amount directly with SDMC, which is in gross violation of High Court orders dated 20.04.2020 and 12.06.2020.",,,,

(11) FORCE MAJEURE RELIEF TO BE GOVERNED BY MORT&H LETTER DATED 18.05.2020, NOT O.M. DATED 19.02.2020:",,,,

Further case of SDMC is that Ld. Single Judge has erred in holding that the OM dated 19.02.2020 issued by the Ministry of Finance will be applicable in present case in the context of Force,,,,

Majeure for the period of COVID-19. This O.M. is not applicable in the present case as it is applicable only for procurement of goods. The NHAI has later issued directions in accordance with,,,,

MORT&H letter dated 18.05.2020 giving Force Majeure relief for all National Highways for Toll contractors having effective date starting from 26.03.2020. It further provides for a 2nd Force,,,,

Majeure period post resumption of tolling from 24.04.2020 till traffic resumes 90% of the traffic in pre-lockdown (period 15.03.2020 to 21.03.2020) weekly average traffic count. The impugned,,,,

order giving a finding contrary to the NHAI directives applicable to both MEP and SDMC is wrong and deserve to be set aside.,,,,

(12) DOCTRINE OF FORCE MAJEURE CANNOT BE APPLIED ON COMPLINCE OF THE COURT ORDER:,,,,

The basic contention of the SDMC is that the doctrine of Force Majeure cannot be applied on the compliance of the Court Order so as to annihilate the Court directions and it cannot be applied,,,,

except in accordance with the prerequisite and the procedure laid out in the contract. Moreover, learned Single Judge fell into error by misreading the OM dated 19.02.2020 issued by the",,,,

Ministry of Finance in the context of Force Majeure. The letter dated 19.03.2020 having been issued by MEP after the termination of the contract, so there was no occasion for MEP to invoke",,,,

Force Majeure and in any event, notice was not issued within 5 days following such occurrence as provided in the contract.",,,,

(13) ENTIRE TENDER PROCESS FOR NEW CONTRACTOR DONE WITH APPROVAL OF THE COURT:,,,,

Another argument put forward by SDMC is that the entire tender process for appointing the new contractor was repeatedly approved by the Division Bench of this Hon’ble Court in W.P.,,,,

(C) 2995/2020 (order dated 27.05.2020) and W.P.(C) No. 3129/2020 (order dated 15.05.2020). Also, on 20.04.2020, Ld. Single Judge in W.P.(C) 2241/2020 further approved the tender process",,,,

and permitted SDMC to continue with it and also award the contract to a third party subject to handing over of sites only on 25.05.2020. This order was challenged in review by MEP but again,,,,

no relief was granted to MEP on 27.04.2020. LOI was thus issued on 27.05.2020 to the successful bidder in compliance of directions of Hon’ble High Court dated 20.04.2020, which order is",,,,

still valid and subsisting.,,,,

(14) STATUTORY PUBLIC FUNDS BEING ILLEGALLY SIPHONED OFF BY MEP:,,,,

As per SDMC, toll tax is a major source of revenue for the Municipal Corporation. While MEP has misappropriated thousands of crores of public funds, SDMC is facing a major financial crisis",,,,

and is unable to fulfil its municipal duties or even pay salaries of its employees. The impugned order makes a serious mistake in giving a carte blanche to MEP and permit them to escape from,,,,

their liability to pay even as per the Court order. Since the beginning of the contract, MEP has been playing tactics to delay and avoid paying its contractual dues. It has been further submitted",,,,

that in view of the above, all applications filed by MEP were liable to be dismissed including the application for modification of the order dated 02.03.2020. In fact, the petition itself ought to be",,,,

dismissed in view of the subsequent events as held in Shipping Corporation India Ltd. vs. Machado Brothers & Ors. (2004) 11 SCC 168. The impugned order based on such a misconstrued and,,,,

misconceived presuppositions has resulted in a grave miscarriage of justice and unless it is set aside, till then it leaves no scope for the Appellant to stay afloat in the original writ. The above",,,,

conduct of MEP ought to have been noticed by the learned Single Judge and no reliefs were merited to such a litigant. The above anomalies need to be corrected by this Appellate Court.,,,,

CITATIONS ON BEHALF OF SDMC,,,,

Ld. ASG has relied upon the following judgments in support of his arguments:,,,,

Energy Watchdog Vs. CERC & Ors. (2017) 14 SCC 80: It is held in this judgment that Force Majeure is governed by Section 32 and Section 56 of the Indian Contract Act, 1872, depending",,,,

upon the circumstances as to whether it is part of the contract or not.,,,,

Satyabrata Ghose Vs. Mugneeram Bangur & Co. AIR 1954 SC 44: As per this decision, in context of India, the supervening impossibility is governed by Section 56 of the Indian Contract Act.",,,,

O.M.P.(I)(Comm) No. 88/2020 M/S Halliburton Offshore Services Inc. Vs. Vedanta Limited & Anr: This judgment reiterates the law laid down in Energy Watchdog vs. CERC (Supra).,,,,

Conduct of the parties prior to COVID-19 is to be examined.,,,,

Assistant Collector of Central Excise Chandan Nagar, West Bengal Vs. Dunlop India Ltd. & Ors. (1985) 1 SCC 260: It is observed that Governments do not run on Bank Guarantees.",,,,

Kerala State Electricity Board & Anr. Vs. Kurien E. Kalathil & Ors. (2000) 6 SCC 293: It is held that interpretation and implementation of a clause in a contract cannot be the subject matter,,,,

of a writ petition.,,,,

Nabha Power Limited (Npl) Vs. Punjab State Power Corporation Limited (Pspcl) & Anr. (2018) 11 SCC 508: The contract is to be read as a whole and a particular clause should not do,,,,

violence to another part of the contract.,,,,

Burmah Shell Oil Distributing Now Known as Bharat Petroleum Corporation Ltd. Vs. Khaja Midhat Noor & Ors. (1988) 3 SCC 44: It was held that notice must be read in the context of the,,,,

facts of each particular case having regard to the situation of the parties to whom it is addressed.,,,,

Akash Ganga Builders & Engineers (P) Ltd. Vs. G.P. Seth HUF & Anr. 1999(50) DRJ (DB): As per this judgment, earlier communication to terminate the tenancy by end of the month and",,,,

vacate the premises and hand over the possession is to be read with the subsequent letter which gave one week’s more grace to the tenant and it does not render the earlier notice invalid.,,,,

Shipping Corporation of India Ltd. Vs. Machado Brothers & Ors. (2004) 11 SCC 168: Continuation of a suit after disappearance of the cause of action would amount to an abuse of process,,,,

of the court.,,,,

State of Kerala & Ors. Vs. M.K. Jose (2015) 9 SCC 433: Where alternative and equally efficacious remedy is available, the litigant should pursue that remedy instead of filing a writ petition.",,,,

We have gone through all the above-mentioned judgments thoroughly and have taken into consideration the law laid down in these judgments while deciding these appeals.,,,,

SUBMISSIONS ON BEHALF OF MEP:,,,,

Mr. Mukul Rohatgi, Senior Advocate and Mr. Abhishek Manu Singhvi, Senior Advocate with Mr. Rajiv S. Dwivedi and Mr. Azeem Samuel, Advocates have submitted on behalf of MEP as",,,,

under:,,,,

A. THE FORCE MAJEURE (FM) CLAUSE COMES INTO OPERATION FROM 19.02.2020 EVEN THOUGH NOTICE INVOKING FM CLAUSE IS DATED 19.03.2020:,,,,

A1. The FM Clause 15 of the contract is very clear. It provides for reduction of weekly instalments if any circumstance causes a “material adverse impactâ€. It is settled law that an FM,,,,

clause by its very nature tends to override all other provisions of the agreement.,,,,

A2. It is impossible to pin point a starting date for an FM Event such as the Coronavirus and MEP believes that impact in collection were being felt from start of February 2020. However, since",,,,

SDMC itself acknowledged that circular of 19.02.2020 constituted FM, so MEP has also accepted the same.",,,,

A3. SDMC being a public body must be penalized for acting in such an unbecoming manner. On one hand, it says that the circular dated 19.02.2020 constitutes FM and on the other it says that",,,,

for MEP it doesn’t.,,,,

A4. There are two kinds of FMs defined in the agreement between MEP and SDMC. FM simpliciter (Clause 15.1) and FM event (Clause 15.2 and 15.3). The requirement for giving notice is,,,,

only with respect to FM event and not FM simpliciter. COVID pandemic is covered under FM simpliciter â€" as a circumstance having “material adverse impactâ€. Therefore, no notice",,,,

required to be given within 5 days under clause 15.3.,,,,

A5. Even guidelines issued by MORTH dated 18.05.2020 supports the contention that COVID-19 pandemic constitutes FM and toll concessionaires such as MEP can’t be asked to deposit,,,,

full amount as per the agreement.,,,,

Amount payable between 26.11.2019 to 17.02.2020 as

per order dated 26.11.2020 (12 weeks x 20 cr/week)",240.00 Cr.,,,

Amount paid between 26.11.2019 to 17.02.2020,161.55 Cr,,,

Balance amount,79.00 Cr.,,,

Amount of BG encashed by SDMC,64.00 Cr.,,,

Balance payable,15.00 Cr.,,,

E7. The termination notice has been rightly cancelled by Ld. Single Judge vide his order dated 12.06.2020.,,,,

F. WHETHER A RETIRED JUDGE SHOULD BE APPOINTED TO ADJUDICATE THE DISPUTES BETWEEN THE SDMC AND MEP?,,,,

F1. As per MEP, it is evident from a bare reading of the order dated 31.01.2020 that though it is lengthy order, it is non-reasoned and reflects of prejudice. The SDMC has not been asked to file",,,,

its reply. The documents of SDMC have suddenly appeared in the order, without the same being either brought on record by SDMC, nor the same were argued or even presented by them. The",,,,

Commissioner proceeded as if he is the Party Respondent, therefore, he is aware of all the documents and facts of SDMC. It is to be further noted that many of the arguments advanced by the",,,,

Commissioner to deny relief were not argued by SDMC. Since they had not filed any reply, therefore there is no question of any pleading on behalf of SDMC. In fact, SDMC barely replied",,,,

orally to any assertion made by MEP and the order of the Commissioner, SDMC dated 31.01.2020 appears at best to be a reply of the SDMC to the allegations made by MEP. These allegations",,,,

and “replyâ€​ in the form of an “Orderâ€​ needs to be independently adjudicated.,,,,

F2. This dispute resolution clause 19 contained in Agreement is provided for a two-step adjudication. The first step is presided over by the Competent Officer, clause 5, and the second step is",,,,

presided over by the Commissioner, SDMC.",,,,

F3. The unique thing of this case is that till 16.12.2019, the Commissioner SDMC was adjudicating as the Competent Officer and he had already rejected the claims of MEP. It is for this reason",,,,

that the order dated 26.11.2019 passed by this Hon’ble Court gave the Commissioner a way out by appointing a Retired Judge.,,,,

F4. It is to be noted that in order to cover up the loophole of not having appointed a “Competent Officerâ€, the Commissioner sought to do the same on 16.12.2019 and they proceeded to hear",,,,

the matter.,,,,

F5. MEP specifically moved an application before the Commissioner to appoint a Retired Judge dated 20.12.2019 and 07.01.2019 which was dismissed, it seems orally without even the decision",,,,

being communicated to MEP and MEP learning of the same only in the order dated 31.01.2020.,,,,

F6. When the MEP made a prayer before the Ld. Single Judge to appoint a retired High Court Judge, to give report on the disputes between the parties, the SDMC, to counter this contention,",,,,

relied upon the decision of the Supreme Court in State of Kerala & Ors. v. M. K. Jose (2015) 9 SCC 433, referred to in para 18 & 19 of the 12th June order and the Court held:",,,,

Para 18. As regards the petitioner’s request for seeking appointment of a retired High Court Judge to prepare a report after hearing both sides, the Corporation contends that the same is",,,,

impermissible.....,,,,

Para 19. The Court agrees with the contention of the respondent in this regard, therefore, such an appointment cannot be considered. The argument for seeking such appointment is untenable",,,,

and is accordingly rejected.,,,,

F7. In this regard, MEP begs to submit that the aforesaid judgement is wholly inapplicable in the facts of this case. This was a case where in a writ petition, the Division Bench had appointed two",,,,

Advocates as Joint Commissioners to inspect the site and to submit the report in respect of the disputed questions mentioned in the order.....,,,,

F8. In the instant case, the prayer of the MEP is that since the Dispute Resolution Clause (Clause 16) of the Agreement has been rendered un-workable by the conduct of SDMC, and SDMC",,,,

has violated the first principle of natural justice, therefore, a retired High Court Judge may be nominated to adjudicate the disputes between the parties. This prayer has wrongly been rejected by",,,,

the Single Judge on the basis of an inapplicable judgment. The said rejection has been challenged in the LPA 167/2020.,,,,

G. WHETHER the orders of the High Court precluded SDMC from encashing the Bank Guarantee therefore the BG does not amount to payment?,,,,

G1. As per MEP, the FM comes into effect on 19.02.2020 and therefore the liability to pay Rs.20 Cr. per week stood suspended from 19.02.2020. Therefore, per se MEP could not have been",,,,

defaulted due to non-payment of Rs.20 Cr. on 09.03.2020 and 16.03.2020.,,,,

G2. Without prejudice to the above contention, it is submitted by MEP that a bare reading of orders dated 26.11.2019 and 02.03.2020 shows clearly that the Court did not disturb the working of",,,,

the Contract, except to the extent of reducing the weekly remittance.",,,,

H. Issue of Post-Dated Cheques.,,,,

H1. At the outset it is stated that PDC’s never formed part of the agreement between MEP and SDMC. The very fact that SDMC now insists on the same shows the arbitrary manner in,,,,

which it functions taking advantage of its dominant position.,,,,

H2. It was argued by SDMC that MEP offered to pay PDCs to secure amount, which statement is false as this illegal demand was generated on account of advice received by SDMC from",,,,

it’s legal advisor Mr. Gaurav Banerjee, Sr. Advocate and Ms. Pinky Anand, Sr. Advocate, ASG and the same is recorded in the letter dated 21.10.2018.",,,,

H3. That the said demand for PDC was first communicated to MEP vide letter dated 07.02.2019, wherein the requirement was only for one-month worth of PDC’s.",,,,

H4. It is pertinent to mention herein that on one hand SDMC refuses to refer the matter to an independent arbitrator for adjudication since according to it clause 16 does not permit the same and,,,,

yet on the other hand it modified the contract to suits its interests.,,,,

In the light of the above submissions, it has been prayed on behalf of MEP that this Hon’ble court may kindly be pleased to allow the LPA 167/2020 and dismiss LPA No. 165/2020.",,,,

While considering the case of both parties, it is to be kept in mind that original writ petition bearing No. 2241/2020 is still pending and it has not progressed any further after the impugned",,,,

orders have been passed. The orders dated 12.06.2020 and 24.06.2020 impugned before us are interim orders and any observations made therein are to be taken prima facie for disposal of the,,,,

applications pending before the learned Single Judge without affecting the merits of the case and these interim directions/orders shall finally merge with the final order to be passed by the learned,,,,

Single Judge on merits of the writ petition after giving chance to both the sides to make submissions in support of their respective stands before the learned Single Judge on the dispute in hand.,,,,

We will endeavor not to express any opinion on the pending controversies before the learned Single Judge, although both the parties have made submissions beyond the scope of these appeals.",,,,

The order dated 02.03.2020 is basically a continuation of earlier order passed on 26.11.2019 by which MEP was directed to pay Rs.20.00 crores per week. There had been some defaults in,,,,

the meantime and on 02.03.2020, the learned Single Judge quantified the said defaults in compliance with the order dated 26.11.2019 to the tune of Rs.115.04 crores and as mentioned in para 5",,,,

of the said order, this amount was directed to be paid by MEP to SDMC in three equal monthly installments; the first installment to be paid within 15 days from 02.03.2020 and the said payments",,,,

were to be made without prejudice to the respective rights and contentions of the parties. Apart from this, MEP was to pay Rs.20.00 crores per week in terms of the earlier order dated",,,,

26.11.2019 and another direction regarding issuance of fresh post-dated cheques was also to be complied with by MEP. Stay against coercive steps was granted subject to compliance of these,,,,

directions and it was clarified that in case the payment of Rs.20.00 crores per week is not made or MEP commits any other default, the interim order shall stand automatically vacated. It appears",,,,

that SDMC was more or less satisfied with this order, being interim in nature, subject to final outcome of the writ and the payments being made at reduced rate of Rs.20.00 crores per week by",,,,

MEP instead of the contractual amount. On the other hand, MEP filed a detailed application being C.M.No.11093/2020 for modification of order dated 02.03.2020 purportedly on account of",,,,

certain events which had taken place in the meantime. The main ground urged is the application of clause 15 of the contract regarding Force Majeure with effect from 19.02.2020 in terms of,,,,

Govt. of India’s notification of even date by which the spread of Pandemic i.e. Covid-19 was termed as an instance of Force Majeure (FM) and on the same basis modification of the order,,,,

dated 02.03.2020 was prayed seeking exemption from paying Rs.20.00 crores per week and from making other payments during the period when Force Majeure is in force. Reliance was also,,,,

placed on notification dated 18.05.2020 of Ministry of Road Transport and Highways (hereinafter referred as “MORTHâ€), Government of India wherein details have been mentioned as to",,,,

how period of pandemic is to be treated in the contracts entered into by NHAI for construction of highways and for collection of tolls.,,,,

Another development which had taken place in the meantime was that on 16.03.2020 SDMC had served a notice on MEP terminating the contract of MEP for committing defaults in making,,,,

payments in terms of order dated 02.03.2020. It is the admitted case of both parties that the court ordered payment of Rs.20.00 crores per week was not paid in full on 09.03.2020 when the first,,,,

payment was due for the week commencing from 02.03.2020 to 08.03.2020 and as per SDMC, only Rs.13.50 crores were received from MEP leaving behind a short payment of Rs.6.50 crores.",,,,

Similarly, for the second week i.e. from 09.03.2020 to 15.03.2020, out of due payment of Rs.20.00 crores, as per SDMC, only a sum of Rs.3.00 crore was received from MEP leaving behind an",,,,

unpaid amount of Rs.23.50 crores for these two weeks. Moreover, the 1/3rd payment due out of Rs.115.04 crores as quantified in the order dated 02.03.2020 was not paid. In these",,,,

circumstances, SDMC served termination notice under clause 17 of the contract and MEP was directed to hand over the toll booths to SDMC by 14.04.2020. On 19.03.2020 MEP sent a letter to",,,,

SDMC claiming invocation of Force Majeure. On 20.03.2020 in LPA No. 140/2020, filed by MEP against order dated 02.03.2020, the Division Bench ordered MEP to comply with the order",,,,

dated 02.03.2020 by 24.03.2020. On 24.03.2020 MEP again wrote a letter to the SDMC invoking Force Majeure on the basis of Government of India’s O.M. dated 19.02.2020.,,,,

Another incident on which MEP has based its claim for modification of order dated 02.03.2020 and for challenging the termination of the contract by SDMC on 16.03.2020 is that on,,,,

25.03.2020 a Full Bench of this Court passed an order extending all interim orders in operation as on 16.03.2020 and thereafter this order was extended from time to time due to the pandemic,,,,

situation as the physical hearings were suspended in the High Court of Delhi. SDMC encashed bank guarantees submitted by MEP totalling to Rs.64.00 crores between 31.03.2020 to,,,,

07.04.2020. In the meantime, the date of handing over of the toll booths was extended from time to time by learned Single Judge. On 14.05.2020, MEP had withdrawn its earlier LPAs against",,,,

order dated 02.03.2020 passed in WPC No. 2241/2020 and a final order passed on 26.11.2019 in the earlier writ petition filed by the MEP. An online tender was issued by the SDMC and letter,,,,

of intent was issued on 27.05.2020 to the successful bidder M/s Sahakar Global Limited.,,,,

By the impugned order dated 12.06.2020, learned Single Judge has come to the conclusion that the Force Majeure clause was rightly invoked by MEP vide notice dated 19.03.2020; however,",,,,

national lockdown was declared on 24.03.2020, which was to be effective from the next day. Learned Single Judge had noticed that till the invocation of Force Majeure, the MEP had to comply",,,,

Date,RFID Collection@ 13 toll plazas,"Cash Collection for all

124 toll plazas",Total Collection,

01.02.2020,2423700,3963800,6387500,

02.02.2020,2137200,3717300,5854500,

03.02.2020,2377900,4091800,6469700,

04.02.2020,2579000,4239000,6818000,

05.02.2020,2559400,4221800,6781200,

06.02.2020,2569100,4228700,6797800,

07.02.2020,2357700,3737000,6094700,

08.02.2020,1976300,3294000,5270300,

09.02.2020,2174200,3838800,6013000,

10.02.2020,2643200,4189000,6832200,

11.02.2020,2625300,4193800,6819100,

12.02.2020,2604700,4314400,6919100,

13.02.2020 2617400 4360000 6977400

14.02.2020 2475500 4441900 6917400

15.02.2020 2258000 4324200 6582200

16.02.2020 2064800 4026000 6090800

17.02.2020 2301400 4232500 6536900

18.02.2020 2424200 4318900 6743100

19.02.2020 2451900 4374500 6826400

20.02.2020 2359900 4277900 6637800

21.02.2020 2273900 4117500 6391400

22.02.2020 2147100 3811000 5958100

23.02.2020 1897200 3683800 5581000

24.02.2020 2077300 3924300 6001600

25.02.2020 2346600 3170300 5516900

26.02.2020 2372500 3150600 5523100

27.02.2020 2479800 3285000 5764800

28.02.2020 2494100 3370900 5865000

29.02.2020 2253300 2917500 5170800

Feb- 68322600Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 113819200

20Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 182141800

Date wise details of Toll Tax Collection:Â Â Â Â Â March-20

Date RFID Collection@ 13 toll plazas Cash Collection for allTotal Collection

124 toll plazas

01.03.2020 1885700 1496198 3381898

02.03.2020 2101900 1498502 3600402

03.03.2020 2150100 1473273 3623373

04.03.2020 2228900 1487400 3716300

05.03.2020 2285600 1498267 3783867

06.03.2020 2319800 1499701 3819501

07.03.2020 2190200 1509335 3699555

08.03.2020 1776500 1476458 3252958

09.03.2020 1405100 929137 2334237

10.03.2020 783900 575831 1361731

11.03.2020 1755000 1254234 3009234

12.03.2020 2132100 1497366 3629466

13.03.2020 2079100 1450355 3529455

14.03.2020 1885500 1393796 3279296

15.03.2020 1630800 1345931 2976731

16.03.2020 1869500 1377844 3247344

17.03.2020 1891400 1430643 3322043

18.03.2020 1949900 1465927 3415827",13.02.2020,2617400,4360000,6977400

,14.02.2020,2475500,4441900,6917400

,15.02.2020,2258000,4324200,6582200

,16.02.2020,2064800,4026000,6090800

,17.02.2020,2301400,4232500,6536900

,18.02.2020,2424200,4318900,6743100

,19.02.2020,2451900,4374500,6826400

,20.02.2020,2359900,4277900,6637800

,21.02.2020,2273900,4117500,6391400

,22.02.2020,2147100,3811000,5958100

,23.02.2020,1897200,3683800,5581000

,24.02.2020,2077300,3924300,6001600

,25.02.2020,2346600,3170300,5516900

,26.02.2020,2372500,3150600,5523100

,27.02.2020,2479800,3285000,5764800

,28.02.2020,2494100,3370900,5865000

,29.02.2020,2253300,2917500,5170800

,"Feb-

20Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â",68322600Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â,113819200,182141800

,,,,

,Date wise details of Toll Tax Collection:Â Â Â Â Â March-20,,,

,Date,RFID Collection@ 13 toll plazas,"Cash Collection for all

124 toll plazas",Total Collection

,01.03.2020,1885700,1496198,3381898

,02.03.2020,2101900,1498502,3600402

,03.03.2020,2150100,1473273,3623373

,04.03.2020,2228900,1487400,3716300

,05.03.2020,2285600,1498267,3783867

,06.03.2020,2319800,1499701,3819501

,07.03.2020,2190200,1509335,3699555

,08.03.2020,1776500,1476458,3252958

,09.03.2020,1405100,929137,2334237

,10.03.2020,783900,575831,1361731

,11.03.2020,1755000,1254234,3009234

,12.03.2020,2132100,1497366,3629466

,13.03.2020,2079100,1450355,3529455

,14.03.2020,1885500,1393796,3279296

,15.03.2020,1630800,1345931,2976731

,16.03.2020,1869500,1377844,3247344

,17.03.2020,1891400,1430643,3322043

,18.03.2020,1949900,1465927,3415827

19.03.2020 1873600 1442066 3315666

20.03.2020 1823700 1470390 3294090

21.03.2020 1439200 1022826 2462026

22.03.2020 405300 298400 703700

23.03.2020 191400 240000 431400

24.03.2020 162100 171600 333700

25.03.2020 110700 113900 224600

26.03.2020 121300 162600 283900

27.03.2020 121600 136900 258500

28.03.2020 141900 138700 280600

29.03.2020 124900 140000 264900

30.03.2020 141300 154400 295700

31.03.2020 74100 104900 179000

Feb-20 41052100 30258900 71311000

Monthly Pass collection for the month 208890000

Total Collection 280201000

As per the OM dated 18.05.2020, the second phase of Force Majeure, post resumption of tolling activities, was from 20.04.2020 till traffic resumes 90% of the traffic plying during the pre-

lockdown period on the basis of actual average traffic count and during this period, the agreed remittance was waived and estimated remittance based upon actual traffic data was allowed to be

deposited by the contractors with NHAI subject to meeting of 50% of administrative and toll collection expenses to be calculated based upon fixed annual administrative charges. It means that

from 20.04.2020, till the traffic reaches 90% of the weekly traffic prior to declaration of lockdown, the contractors were allowed to remit the actual collection of toll tax made by him after

deduction of 50% of their administrative and toll collection expenses. In the present case, since toll collection activities were never suspended, so the para No. 2(C) (I) is not applicable and the

appropriate paragraph of OM dated 18.05.2020, which is applicable, is para 2(C) (II) and as such with effect from the date when lockdown was declared, i.e., 26.03.2020 onwards MEP was

required to remit the actual toll collection to SDMC on the basis of invocation of Force Majeure after deducting 7.5% as administrative and toll collection expenses and not 15% as claimed by

them and so ordered by Ld. Single Judge, because as per OM dated 18.05.2020 only 50% of the administrative and toll collection expenses were to be reimbursed and not 100% of the same. We

hold that there was no need to give notice of Force Majeure as the Government of India itself has made the said declaration to be effective from 26.03.2020 vide its OM dated 18.05.2020. It also

takes care of the objection of the SDMC that MEP had given notice of invocation of Force Majeure only on 19.03.2020.

As far as the observation of the learned Single Judge that the notice dated 16.03.2020 by which SDMC had cancelled the contract awarded to MEP is short by one day as 15 days’

period to make payment of Rs.38.00 crores was to be over only on 17.03.2020, we agree with him. Although it has been argued on behalf of SDMC that mere availability of a right to invoke

bank guarantee cannot be treated equal to the payment to be made on weekly basis by MEP but the act of invocation of these bank guarantee by SDMC, without any reference to the Court,

clearly shows that at least the amount of Rs.41.40 crores (after adjusting the ECC amount) was available to MCD at any given point of time and the short-fall in the weekly payment due on

09.03.2020 and 16.03.2020 could have been met by invoking the said bank guarantees. It is made clear that although by 16.03.2020 MEP was not in default in view of availability of the bank

guarantees at the disposal of SDMC but on 17.03.2020 the MEP had committed default of the order of the court by not remitting the deficient amount to clear the payment of Rs.38.00 crores

due on the said date. Moreover, on 23.03.2020 when the next payment of Rs.20.00 crore as due, there was no lockdown and hence no Force Majeure benefit was available to MEP, hence

Rs.20.00 crores was to be paid on 23.03.2020, which apparently was not paid by MEP to SDMC, although SDMC must have collected a portion of it through the fast tag mode which transfer

the money directly to the bank account of SDMC from the automated fast tag toll booths. For the next three days i.e. 23.03.2020, 24.03.2020, 25.03.2020, the proportionate amount was due from

MEP to SDMC, which MEP is liable to make payment as the applicability of the Force Majeure clause is applicable for toll collections from 26.03.2020 onwards till 90% of the traffic resumes as

per MORTH’s notification dated 18.05.2020.

Keeping in view that gradually the lockdown has been opened up in different phases, an independent assessment is to be made by the learned Single Judge, with the help of officials from

MORTH/NHAI or any other specialized agency as to whether 90% of the traffic has resumed so far, and if so, from which date. It is to be calculated in reference to the weekly traffic prior to

the applicability of Force Majeure clause w.e.f. 26.03.2020. This direction has been issued keeping in view that almost all economic activities, barring opening of schools, etc. are open now and

accordingly the traffic movement to and from Delhi to the neighbouring States has increased to a large extent.

It is needless to state that if the traffic has reached its 90% strength in comparison to the pre-lockdown period, which event might have already taken place or will take place in the near

future, MEP is bound to comply with the directions contained in the interim order dated 02.03.2020 of remitting Rs.20.00 crore per week from the date of reaching 90% traffic level during the

pendency of the writ petition. Learned Addl. Solicitor General appearing on behalf of SDMC has vehemently argued that the writ petition itself is not maintainable for enforcement of a contract

entered into by SDMC with one of its vendors and their application in this regard, being C.M.No.11397/2020, is pending disposal for the last many months. It is expected that the said application

will be taken up on priority and disposed of at the earliest after affording opportunity to both sides to put forward their respective submissions.

It has been noticed that no progress has been made by both the parties in the main writ petition although there is no stay of proceedings ordered by this Court at any point to time. It is

expected that both the parties shall complete the pleadings at the earliest and the writ petition will be disposed of as expeditiously as possible by the learned Single Judge after affording

opportunity to both sides to address their arguments. The option of ordering the settlement of dispute by alternative dispute resolution mechanism is also open to the learned Single Judge, of

course with consent of the parties.

There is a serious dispute regarding the actual number of vehicles passing through the toll gates during the Force Majeure period as MCD is claiming that a large number of vehicles are

passing through the said toll gates whereas claim of MEP is that lesser number of vehicles are passing through the said gates. MEP was expected under the clauses of the contract to give

average weekly traffic count and to calibrate the toll collection system with the servers of MCD. To put this controversy at rest, the learned Single Judge may explore all the possibilities to arrive

at a reasoned conclusion as to whether the number of vehicles passing through these toll plazas are correct or not as different figures are being claimed by the contesting parties. The said

exercise is also necessary to decide two contempt petitions filed by both the parties against each other, which are pending adjudication before this Court. The MCD has submitted a video film

showing the traffic passing through toll gates and on the other hand MEP has challenged even the appointment of the agency, which has allegedly conducted the said survey.

In case the system of actual collection of toll tax to be deposited by MEP with SDMC after adjustment of administrative and toll collection expenses continues for some time, the SMCD wil

be at liberty to get the said toll plazas inspected by its inspectors/staff on regular basis and/or by continuously monitoring the said toll plazas by installing the CCTV system or any other

appropriate gadgets to enable it to count the actual number of vehicles passing through toll gates and paying the toll, so as to avoid continuous bickering between the two parties on this issue and

the court being unable to continuously monitor implementation of directions to deposit the amount so collected by MEP in the bank accounts of SDMC after deducting the administrative and toll

collection expenses @ 7.5%. It is made clear that the excess 7.5% administrative and toll expenses for the period from 26.03.2020 till today deducted by MEP from collection of toll tax made by

it is to be deposited in the bank account of SDMC within 15 days of passing of this order by MEP as the actual rate of administrative and toll collection expenses allowed to be deducted by the

contractor is 50% of the agreed expenses, which comes to 7.5% and not 15% as claimed earlier by the MEP.

As far as the appeal of MEP being LPA No.167/2020 is concerned, we are not inclined to allow the same as it has been clearly held by learned Single Judge that no objection was raised to",19.03.2020,1873600,1442066,3315666

,20.03.2020,1823700,1470390,3294090

,21.03.2020,1439200,1022826,2462026

,22.03.2020,405300,298400,703700

,23.03.2020,191400,240000,431400

,24.03.2020,162100,171600,333700

,25.03.2020,110700,113900,224600

,26.03.2020,121300,162600,283900

,27.03.2020,121600,136900,258500

,28.03.2020,141900,138700,280600

,29.03.2020,124900,140000,264900

,30.03.2020,141300,154400,295700

,31.03.2020,74100,104900,179000

,Feb-20,41052100,30258900,71311000

,Monthly Pass collection for the month,,,208890000

,Total Collection,,,280201000

the due amount arrived at on 02.03.2020 in compliance of the court order dated 26.11.2019, being Rs.115.04 crores. However, both the parties may reconcile their accounts from 03.03.2020",,,,

onwards to ensure strict compliance of the order dated 02.03.2020. The MEP shall ensure that all the bank guarantees and post-dated cheques have been deposited with SDMC and the bank,,,,

guarantees are kept valid during the period when the writ petition No. 2241/2020 remains pending before the learned Single Judge. The steps to extend the bank guarantees and revalidate the,,,,

post-dates cheques be taken well in time by MEP to ensure that no lapse is committed in this regard. As far as the request of MEP to appoint a retired Judge to decide the dispute is concerned,",,,,

we are not inclined to order the same without the consent of the other party.,,,,

As far as the order of the Full Bench of this Court regarding extension of the interim order prevailing as on 16.03.2020 vide order dated 25.03.2020 is concerned, it is clarified that the said",,,,

order nowhere states that the conditional stay orders will be extended without complying with the conditions. Although the cancellation the contract cannot take place but if the contractor does,,,,

not comply with condition of payment of ordered amount, it cannot take any benefit of the order of the Full Bench dated 25.03.2020.",,,,

In view of the above, we hereby dispose of both the Letters Patent Appeals by holding that:",,,,

1). The Force Majeure clause stands invoked w.e.f. 26.03.2020 in terms of OM dated 18.05.2020 issued by MORTH, Govt. of India and it shall stand revoked when 90% traffic, in comparison",,,,

to the traffic before lockdown period of weekly basis, stands resumed.",,,,

2). The SDMC shall be entitled to weekly payments of Rs.20.00 crores till 25.03.2020 and after resumption of 90% traffic in comparison to the pre-lockdown period on weekly basis during,,,,

pendency of the writ petition. Arrears of Rs.115.04 crores are held to be cleared without being affected by Force Majeure clause.,,,,

3). With effect from 26.03.2020 till resumption of 90% traffic in comparison to pre-lockdown period on weekly basis, MEP shall continue to deposit entire collection of toll tax, ECC, cash",,,,

received from sale of monthly passes, fast tag stickers and any other revenue generated from any toll collection in the bank accounts of SDMC on daily basis by next day after deduction of",,,,

administrative and toll collection expenses @7.5%. Excess administrative and toll collection expenses deducted by MEP are to be deposited by MEP with SDMC in 15 days.,,,,

4). Ld. Single Judge may order for an exercise to be conducted by a reputed agency to estimate the flow of traffic passing through toll gates managed by MEP from 26.03.2020 onwards on the,,,,

basis of the available data and material. In the meantime, SDMC is at liberty to get the regular inspections done at toll plazas or to install CCTV or any other mechanism to count the vehicles",,,,

passing through toll gates till 90% traffic is resumed.,,,,

5). The finding of the learned Single Judge regarding termination notice dated 16.03.2020 is upheld as it was issued a day in advance.,,,,

6). The full Bench order dated 25.03.2020 cannot be read to mean that MEP can take benefit of the interim stay order without complying with the conditions mentioned in the said order.,,,,

8). There is no occasion to appoint a Retired Judge to adjudicate the dispute at this stage. However, the Ld. Single Judge may explore the possibility of referring the matter to alternative dispute",,,,

resolution with consent of parties.,,,,

7). Date of hearing before the Ld. Single Judge is preponed to 24th November, 2020 and the Ld. Single Judge is requested to decide the Writ Petition expeditiously. Both the parties shall extend",,,,

full cooperation in this regard.,,,,

With these directions, both the Letters Patent Appeals and pending applications are disposed of.",,,,