R. Raghunandan Rao, J
1. The applicant herein is an infrastructure company, which is engaged in execution of various infrastructure projects in India and abroad. The respondent, which is the Government of A.P., had proposed the construction of a bridge over the Gauthami branch of River Godavari between Yanam and Yedurlanka in East Godavari District under Build-Operate-Transfer (BOT) model. The said contract was awarded to the applicant and an agreement was executed between the parties on 06.10.1999. The essential terms of the contract were that the total cost of the project, which was estimated at Rs.110 crores, was to be recovered by the applicant by way of subsidy of Rs.69 crores granted by the Government of A.P., and by collection of toll charges on the vehicles, passing through the said bridge, for a period of 15 years.
2. The bridge was completed and the applicant started collecting toll charges from the vehicles using the said bridge from 2004. However, the toll charges collected by the applicant were falling much below the projections on the basis of which the applicant had undertaken the construction of the bridge.
3. The applicant had various grievances against the respondent-Government. Some of the grievances being:-
a) The contention of the applicant is that the toll charges, fixed earlier, were reduced by almost half at the instance of Hon’ble Minister for Roads and Buildings from 01.07.2004. It was only subsequently, that the applicant had started collecting toll charges as per the original rate from March 2008, after obtaining permission from the respondent-Government.
b) The Agreement dated 06.10.1999 had stipulated that the Government would terminate the operation of ferry services near Yanam, to ensure that all the traffic in the area would pass through the bridge constructed by the applicant. However, this was not done. As a result, the applicant lost a considerable amount of toll charges that could have been collected from the lost traffic.
c) The bid documents had projected the vehicular traffic on the bridge at 1500 commercial vehicles per day. The applicant, believing that projection to be correct, had bid for the project and had based it’s financial projections on the availability of a minimum of 1500 commercial vehicles per day for collecting toll charges. The traffic on the bridge never reached these figures. The bridge constructed by the applicant was only over one branch of river Godavari and another bridge was to be constructed nearby, to enable road connectivity between Chennai via Amalapuram. However, the second bridge was not constructed, resulting in further reduction of traffic.
d) There was another toll collection point at Metlavanipalem, about 18 km away from the bridge of the applicant, due to which the applicant’s right to collect toll charges was also deprived for a short period of time.
4. The applicant had raised all these issues and sought compensation from the respondent-Government on various occasions including the letters dated 29.06.2004, 24.07.2004 and 10.12.2004. Subsequently, the applicant again raised this issue by letters dated 08.11.2007, 30.09.2011 and 04.04.2012. The applicant, in these later letters, sought extension of the concession period up to 2050 to enable the applicant to recover the shortfall in future or in the alternative, to refer the dispute to arbitration. As the respondent-Government kept quiet and did not respond to these requests, the applicant had approached this Court by way of the present application.
5. Smt. S. Pranathi, learned counsel appearing for the applicant would submit that the letter dated 04.04.2012 specifically required the respondent-Government to either revise the concession period or to refer the dispute to arbitration as provided under Clause 8.1 of the Agreement dated 06.10.1999. She would submit that the disputes raised by the applicant are clearly arbitrable, in view of Clause 8.1 of the agreement, providing for reference of disputes to arbitration. She would further submit that the applicant has suffered enormous losses on account of the conduct of the respondent-Government and that the applicant has to be compensated for such losses by payment of money which has been quantified at Rs.382,68,77,871/-.
6. The respondent-Government had filed a counter affidavit denying all the allegations made by the applicant. The respondent also took the plea that the period of limitation, for filing the application, had expired long back and as such the question of referring these disputes to an arbitrator would not arise.
7. Sri C. Sumon, learned Special Government Pleader in the office of the learned Advocate General, appearing for the respondent would submit that the initial request of arbitration had been made by way of letter dated 17.12.2007 and the limitation for initiating any action under Section 11 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) would be limited to three years thereon. As the said three years had elapsed by 2010 itself, the question of filing an application in the year 2014 would not arise. He would further submit that the subsequent notice dated 04.04.2012 would not, in any manner, extend the said period of limitation.
8. It must also be noted that both the counsel had relied upon the judgment of the Hon’ble Supreme Court in Bharat Sanchar Nigam Limited and Anr., vs. Nortel Networks India Private Limited (2021) 5 SCC 738.
Consideration of the Court:
9. The applicant by its letter, dated 17.12.2007, had raised the issue of loss on account of operation of ferry crossings at Kotipalli and Mukteswaram in violation of Clause 4.(iv) of the Agreement, the shortfall in anticipation of 1500 commercial vehicles per day and the reduced toll charges collected by the applicant. The said letter, after raising all these claims, requested the Government to compensate the losses by revising the fees payable as toll charges, failing which the letter dated 17.12.2007 was to be treated as a notice for settlement of disputes under Clause 8.1 of the Agreement.
10. Clause 8.1 of the Agreement dated 06.10.1999, reads as follows:
“8.1 Day to day decisions on the implementation of the agreements will be made by the Steering Group / Technical Committee. Any dispute between the Government, and the Enterprise will be settled under the provisions of the Arbitration and Conciliation Act, 1996.”
11. The Government responded to this notice / letter dated 17.12.2007 by way of letter No.13843/Roads IV/1/2004, TR & B Department, dated 01.03.2008, wherein the applicant was permitted to collect tolls on the bridge as per the Agreement with effect from 01.01.2008 while informing the applicant that it was not eligible for any compensation on any account whatsoever.
12. The applicant did not seek for appointment of an arbitrator or reference of dispute to arbitration after receipt of this letter. However, the applicant, after a lapse of about four years, had issued a fresh notice dated 04.04.2012 raising the issues raised in the letter dated 17.12.2007. However, the relief sought from the respondent-Government was the extension of concession period up to 2050 failing which the matter was to be referred to arbitration under Clause 8.1 of the Agreement. The applicant also suggested the names of the two former Judges of the High Court of Andhra Pradesh for being considered for appointment as arbitrators. Thereafter, the applicant had approached this Court by way of the present application.
13. A perusal of letters dated 17.12.2007 and 04.04.2012 would show that both the letters are invoking arbitration under Section 21 of the Act. The Hon’ble Supreme Court in Bharat Sanchar Nigam Limited and Anr., vs. Nortel Networks India Private Limited had held that the question of limitation is a mixed question of fact and law requiring the same to be left open to the arbitral tribunal to decide. The Hon’ble Supreme Court after holding in the above manner had also held that in a limited category of cases, where there is not even any doubt about the fact that the claim is time barred, it would be open to the court to reject the application for reference of disputes to arbitration.
14. In the circumstances, the question before this Court is whether the question of limitation in the present case, is a mixed question of fact and law or whether it is an ex facie clear case of an application being barred by limitation.
15. The applicant had sent a request for arbitration by way of its letter dated 17.12.2007. This was the initial request for arbitration and it would have to be held that the arbitration commenced with the receipt of such letter by the respondent-Government. Section 11 of the Act only stipulates that a party to an arbitration agreement can approach the Court for appointment of an arbitrator after a minimum period of 30 days had elapsed from the date of issuance of notice of arbitration. No outer limit for approaching the Hon’ble Supreme Court was fixed under the Act. The issue of outer limit of time within which a party would have to approach the Court was also considered in the case of Bharat Sanchar Nigam Limited and Anr., vs. Nortel Networks India Private Limited. The Hon’ble Supreme Court, after a review of law on the issue, had held that the period prescribed under Article 137 of the Schedule to the limitation Act, 1963 would apply and the outer limit within which an application under Section 11 can be made, would be three years from the date on which the right to apply accrues.
16. In the circumstances, the period for approaching this court, under Section 11 of the Act would be three years from December, 2007 and the same expired in December, 2010.
17. Smt. S. Pranathi, learned counsel appearing for the applicant would submit that the relief sought in the notice dated 17.12.2007 was a revision in the toll charges, while the relief sought in the letter dated 04.04.2012 is an extension of the concession period. She would submit that two different disputes were raised in these two notices and as such the first notice dated 17.12.2007 would not be a bar to the second notice dated 04.04.2012.
18. A perusal of both the notices would show that the grievance of the applicant was collection of reduced toll charges, continued operation of ferry in the neighbouring area, shortfall in the anticipated traffic of 1500 commercial vehicles per day, and non-completion of the connecting bridge. The change of relief in the letter dated 04.04.2012 would not, in any manner, permit the applicant to raise a second notice of arbitration, as substantive disputes in both the letters are one and the same. In the circumstances, it must be held that the claim is ex facie time barred and no further purpose would be served by referring the said disputes to an arbitrator.
19. Accordingly this Arbitration Application is dismissed. There shall be no order as to costs. As a sequel, pending miscellaneous petitions, if any, shall stand closed.
