OMP-49/2010 Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + OMP No.49/2010 25th January, 2010. ASIAN RESURFACING OF ROAD AGENCY PVT. LTD. ...Petitioner Through: Mr. Sandeep Sethi, Sr. Advocate with Mr. Ashish Mohan, Advocate VERSUS UNION OF INDIA ...Respondent Through: Nemo. CORAM: HON’BLE MR. JUSTICE VALMIKI J.MEHTA 1. Whether the Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes % JUDGMENT (ORAL) VALMIKI J.MEHTA, J 1. By this petition under Section 34 of the Arbitration and Conciliation Act, 1996, the petitioner challenges the Award dated 7.12.2009 passed by the sole Arbitrator declining the claim of the petitioner for grant of increased OMP-49/2010 Page 2 prices of bitumen, used in the work performed under the subject Contract. The contracted work in question, awarded to the petitioner by the respondent, was for strengthening and post- strengthening development works for Main Road No. 56 from RD-O to RD-5600, strengthening of main carriageway and raising of footpath and improvement of Central verge. 2. By the impugned Award, the Arbitrator has dismissed the claim of the petitioner for reimbursement. The Arbitrator has taken the view that when oil marketing companies increased the cost of bitumen, the same cannot be said to be on account of subsequent legislation or equivalent order thereby entitling the petitioner to the benefit of Clause 10C of the Contract. 3. Mr. Sandeep Sethi, learned senior counsel for the petitioner drew my attention to the said Clause 10C to contend that the same has been wrongly understood by the Arbitrator. This Clause reads as under:- “If after submission of the tender, the price of any material incorporated in the works (not being a material supplied from the Engineer-in-Charge‟s stores in accordance with Clause 10thereof) and/or wages of labour increases as a direct result of the coming into force of any fresh law, or statutory rule or order (but not due to any changes in sales tax) and such increase in the price and/or wages prevailing at the time of the last stipulated date for receipt of the tenders including extensions if any for the work, and the contractor thereupon necessarily and properly pays in respect of that material(incorporated in the works) such increased price and/or in respect of labour engaged on the execution of the work such increased wages, then the amount of the contract shall accordingly be varied and provided further that any such increase shall not be payable if such increase has become operative after the stipulated date of completion of the work in question.” OMP-49/2010 Page 3 4. The issue before the Arbitrator was, and before this court is, the interpretation to be put on the expression “any fresh law or statutory rule or order”. The Arbitrator, as already stated above, has held that increased price of bitumen by the oil companies cannot be construed to be an increase under the expression a „statutory order‟. 5. The language of the aforesaid expression used in Clause 10C of the contract is quite clear that reimbursement to the contractor is for any increased cost of material or labour when the same is on account of any increase as a result of an order which has a statutory/legislative flavor, meaning thereby, when the input cost to the contractor increases only because of any statute or ordinance or statutory rule or statutory order, only then in such circumstances, the contractor can claim reimbursement for the higher cost incurred by it. 6. In my opinion, the expression “or order” is a part of the larger expression “statutory rule or order” meaning thereby the order has to be a statutory order emanating from either the legislature or it ought to be passed under a delegated legislation. Merely because bitumen is under an administered price mechanism of the oil companies, cannot mean that, the increased cost of bitumen can be said to be on account of fresh law or statutory rule or statutory order. OMP-49/2010 Page 4 7. During the course of arguments, the counsel for the petitioner was put a query as to whether the increased rates of bitumen are notified by the Government as statutory rule or order. Mr. Sandeep Sethi fairly stated that he is not aware of any such position. At this stage, I see from internal page 6, para 2 of the Award that the fact of the matter is that when rates of bitumen are increased, the same are not notified in the Gazette, and which notification in the Gazette necessarily happens in the case of coming into force of a statute, or a statutory rule or a statutory order. 8. The counsel for the petitioner has very strenuously canvassed before me that the respondent has accepted certain Awards of Arbitrators whereby the Arbitrators had given the increased price of bitumen by holding the same as falling in Clause 10C. Firstly, those Awards, are admittedly not of the present Arbitrator. Secondly, in my opinion, unless there is a judgment of a Court which would have confirmed the interpretation as stated by the Arbitrators holding that price of bitumen is statutory order of the oil companies, I am not bound by such Awards. In my opinion the Union of India was not prudent in those cases and have wrongly accepted the Award of the Arbitrators, but, I do not find that I, as a Court should in any manner be influenced by those actions of the Union of India whereby it has accepted, OMP-49/2010 Page 5 and in my opinion wrongly, an interpretation of Clause 10C of the contract. I may only state that it has been repeatedly held by the Supreme Court while dealing with Article 14 of the Constitution that equality is a positive concept and it cannot be enforced for the purpose of committing an illegality. Though that principle is strictly not applicable herein, but applying the spirit of that principle, I do feel that those Awards which have wrongly held entitlement of payment to the contractors of increased price of bitumen, on account of the orders of the oil companies, as equivalent to statutory orders, if I enforce the same, I would be enforcing the illegal principle in those Awards, and which I cannot and I am not inclined to do so. 9. In view of the above, I am unable to agree with the contentions of the counsel for the petitioner and find that there is no reason for issuing any notice in this petition, which is dismissed, leaving the parties to bear their own costs. VALMIKI J. MEHTA, J January 25, 2010 ib