ANIThe Supreme Court on Tuesday slammed the government for filing frivolous appeals, suggesting that it should “appoint an outsider to point out the flaws” in its decisions-making process.
“…it’s some flaws which is why decision making leads to this… I was warning you from the beginning. We knew from day one. Tell me, do you think you had a good chance,” Justice Sanjiv Khanna asked Additional Solicitor General Vikramjit Banerjee.
The ASG said that “it was difficult.”
The bench also told the ASG that these are "one-sided contracts" and how are companies going to invest. The companies were represented by senior counsel Siddharth Bhatnagar and counsel Sonia Dubey.
The apex court was hearing a batch of appeals filed by the government challenging a 2022 arbitration award that ruled in favour of the companies.
The government and the companies, including one Madhu Transport Company, had entered into an agreement in April 2006 under the Wagon Investment Scheme (WIS) to procure rakes which would then be merged in the general pool of wagons of Indian Railways. While the government had altered the scheme through various circulars, the companies sought to terminate the agreement in March 2014 and hence exercised right of purchase back of wagons by railways.
Such exercise of right to termination was not honoured by the Railways, compelling the companies to move the Delhi High Court, which allowed the petition in November 2015. The HC order also upheld by the SC in 2017.
Despite the SC decision, the railways refused to comply with the SC order and purchase back the rakes. Eventually, the HC referred the matter to arbitration, including on the question of interim directions to pay Rs 8.49 crore, the amount already calculated by the railway authorities against the latter’s counter claim of Rs 404.57 crore.
By an interim award in 2022, the sole arbitrator favoured companies by awarding Rs 8.49 crore towards the price of rake computed and then finally in February 2024, awarded 8% interest per annum on the transport company’s claim of Rs 35.70 crore from the date of termination till actual payment made by the government.
In January 2023, the HC dismissed the government’s challenge to the interim arbitral award.
“…it’s some flaws which is why decision making leads to this… I was warning you from the beginning. We knew from day one. Tell me, do you think you had a good chance,” Justice Sanjiv Khanna asked Additional Solicitor General Vikramjit Banerjee.
The ASG said that “it was difficult.”
The bench also told the ASG that these are "one-sided contracts" and how are companies going to invest. The companies were represented by senior counsel Siddharth Bhatnagar and counsel Sonia Dubey.
The apex court was hearing a batch of appeals filed by the government challenging a 2022 arbitration award that ruled in favour of the companies.
The government and the companies, including one Madhu Transport Company, had entered into an agreement in April 2006 under the Wagon Investment Scheme (WIS) to procure rakes which would then be merged in the general pool of wagons of Indian Railways. While the government had altered the scheme through various circulars, the companies sought to terminate the agreement in March 2014 and hence exercised right of purchase back of wagons by railways.
Such exercise of right to termination was not honoured by the Railways, compelling the companies to move the Delhi High Court, which allowed the petition in November 2015. The HC order also upheld by the SC in 2017.
Despite the SC decision, the railways refused to comply with the SC order and purchase back the rakes. Eventually, the HC referred the matter to arbitration, including on the question of interim directions to pay Rs 8.49 crore, the amount already calculated by the railway authorities against the latter’s counter claim of Rs 404.57 crore.
By an interim award in 2022, the sole arbitrator favoured companies by awarding Rs 8.49 crore towards the price of rake computed and then finally in February 2024, awarded 8% interest per annum on the transport company’s claim of Rs 35.70 crore from the date of termination till actual payment made by the government.
In January 2023, the HC dismissed the government’s challenge to the interim arbitral award.
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