Right To Safe & Motorable Roads Is Part Of Fundamental Right To Life; State’s Responsibility To Develop & Maintain Roads: Supreme Court
|The Supreme Court was hearing a Civil Appeal filed against the Judgment of the Madhya Pradesh High Court, Jabalpur Bench, which allowed the Writ Petition of Madhya Pradesh Road Development Corporation (MPRDC).
The Supreme Court held that the right to safe, well-maintained, and motorable roads is a part of the Right to Life under Article 21 of the Constitution of India.
The Court held thus in a Civil Appeal filed against the Judgment of the Madhya Pradesh High Court, Jabalpur Bench, which allowed the Writ Petition of Madhya Pradesh Road Development Corporation (MPRDC) and quashed the Orders of the International Centre for Alternative Dispute Resolution (ICADR) and the Arbitral Tribunal, respectively.
The two-Judge Bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan observed, “Respondent No. 1 was incorporated on 14.07.2004 to develop, build, maintain, and operate the State Highways, District or other local body roads, expressways, and government buildings in Madhya Pradesh. Respondent No. 1 also, on contract, develops and maintains National Highways in or passing through Madhya Pradesh. The Madhya Pradesh Highways Act, 2004, repealing the 1936 Act, also reiterates the State’s role in the development, construction, and maintenance of roads in the State. Since the right to access any part of the country, with certain exceptions and restrictions under certain circumstances, is a fundamental right guaranteed under Article 19(1)(g) of the Constitution, and the right to safe, well-maintained, and motorable roads is recognised as a part of the right to life under Article 21 of the Constitution of India, it is the responsibility of the State to develop and maintain the roads directly under its control.”
The Bench denied the exclusive jurisdiction of the Madhya Pradesh Arbitration Tribunal established under the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 (in short, ‘1983 Act’) to adjudicate disputes arising from works contract involving the State or its instrumentalities.
Senior Advocate Siddharth Dave appeared on behalf of the Appellant while Solicitor General Tushar Mehta appeared on behalf of the Respondents.
Brief Facts
The Appellant company namely Umri Pooph Pratappur (UPP) Tollways Pvt. Ltd. entered into a Concession Agreement for the development of the Umari – Pooph – Pratappur Road on a Build, Operate and Transfer (BOT – Toll + Annuity) basis. The total cost of the project was Rs. 73.68 crores for the augmentation of the existing road from T-Junction of SH-45 at Umari Village to 43.775 km on the Umri – Pooph – Pratappur section of Major District Road (MDR) in the State of Madhya Pradesh, as stipulated in Clause 48.1 of the Concession Agreement. The implementation period was fixed at 24 months from the appointed date. In accordance with Article 9.1.1 and Schedule F of the Concession Agreement, the Appellant furnished a performance security of Rs. 3.68 crores in the form of an irrevocable and unconditional bank guarantee, vide Bank Guarantee. An Escrow Agreement was also executed among the Appellant, Respondent (MPRDC), and Allahabad Bank. M/s. S&P Infrastructure Developers Private Limited and M/s. BLA Infrastructure Private Limited, by Deeds of Guarantee guaranteed the performance of the Appellant under the Common Loan Agreement.
The Appellant alleged that the Respondent arbitrarily fixed the appointed date. Thereafter, it commenced work and vide letter, it was informed that M/s. Vaidya Organisation had been appointed as the Independent Engineer, which did not approve the designs and drawings and directed the Appellant not to proceed with construction. Revised submissions made by the Appellant were eventually approved, which resulted in an escalation of the total project cost to Rs. 99.80 crores. Subsequent delays and disruptions allegedly occurred due to breaches of contractual obligations by the Respondent. With no resolution forthcoming, the Appellant initiated proceedings before the Arbitration Tribunal and subsequently, it filed an Application seeking withdrawal of Reference Case which was allowed. Being aggrieved, the Respondent filed a Writ Petition before the High Court, which allowed the same. Hence, the Appellant approached the Apex Court.
Court’s Observations
The Supreme Court in view of the above facts, noted, “The contract for laying of a State Highway/District Road, when assigned by the Corporation owned and run by the government, assumes the character of a public function – even if performed by a private party – and would satisfy the functionality test to sustain the writ petition. Accordingly, in view of the statutory framework and the nature of relief sought, the writ petition involves a public law element and was thus maintainable before the High Court. The decisions relied upon by the appellant are factually distinguishable and pertain to materially different contexts. As such, they do not advance the appellant’s case and have no application to the facts and legal issues involved in the present case.”
The Court said that the Arbitration and Conciliation Act, 1996 (A&C Act) stands excluded by operation of law in such matters and the private arbitration proceedings initiated by the Appellant are therefore, non est in law, and the proper forum for adjudication is the Madhya Pradesh Arbitration Tribunal established under the 1983 Act.
“A party cannot pursue two mutually inconsistent remedies under different legal regimes arising from the same cause of action. … Even otherwise, Clause 44.3.1 of the Concession Agreement to the extent it purports to permit private arbitration, is inoperative insofar as it seeks to override the statutory mandate of the 1983 Act”, it elucidated.
The Court further reiterated that parties cannot contract out of a statutory obligation enacted in furtherance of public interest and arbitration is not permissible where the legislature has reserved adjudication of disputes to a special forum.
“Accordingly, the attempt of the appellant to invoke Clause 44.3.1 of the Concession Agreement and re-agitate the issue of private arbitration – already settled in Viva Highways and affirmed by this Court – is barred by the doctrine of constructive res judicata and amounts to an abuse of the process of law. The appellant is estopped from challenging the binding nature of Viva Highways, having itself been a party to the earlier SLP proceedings, wherein the said judgment was upheld”, it added.
Conclusion
The Court was of the view that the Appellant’s conduct in withdrawing the Reference Petition before the Arbitration Tribunal, without seeking liberty to re-agitate the claims, and simultaneously initiating proceedings under the A&C Act, constitutes forum shopping, and this conduct, aimed at circumventing the statutory mechanism and reviving abandoned claims, is tainted with mala fides and deserves to be deprecated.
“Further, the appellant’s claims – which arise from events dating back to 2013-2015 – are also barred by limitation under Section 43 of the 1996 Act read with the Limitation Act, 1963. The belated invocation of arbitration in 2022, and its continuation in 2025, is thus clearly time-barred and legally unsustainable”, it also observed.
The Court said that once a reference is withdrawn without obtaining liberty to re-agitate the same, the Appellant stands precluded from initiating a fresh reference on the same subject matter and this substantive bar also applies to any attempt to pursue the same claims before alternative fora.
“Nonetheless, considering the nature of the dispute and in the interests of justice, and in view of the submission made by the learned Solicitor General appearing for Respondent No.1, we are of the opinion that the appellant can be permitted to seek revival of Reference Petition No.61 of 2018 before the Madhya Pradesh Arbitration Tribunal”, it concluded.
Accordingly, the Apex Court disposed of the Appeal and directed the Appellant to file an Application to recall the withdrawal order and seek restoration of Reference Petition within two weeks.
Cause Title- Umri Pooph Pratappur (UPP) Tollways Pvt. Ltd. v. M.P. Road Development Corporation and Another (Neutral Citation: 2025 INSC 907)
Appearance:
Appellant: Senior Advocate Siddharth Dave, AOR Rajat Mittal, Advocates Sadapurna Mukherjee, Saurabh Kumar, and Manvi Sharma.
Respondents: Solicitor General Tushar Mehta, AOR Siddharth Sharma, Advocates Bhuvan Kapoor, Rajeshwari Shankar, and Ishika Chauhan.