Court rules against injunction in highway project termination, emphasizing timely completion over contractor's claims.
In a significant judgment, the Delhi High Court has allowed the National Highways Authority of India (NHAI) to proceed with the termination of a contract with Roadway Solutions India Infra Limited, related to a crucial package of the Delhi-Mumbai National Expressway project. The court emphasized that national interest and the timely completion of infrastructure projects must take precedence over the interim relief sought by the contractor, which aimed to restrain NHAI from acting on its termination notice.
The division bench, comprising Justices Dinesh Mehta and Vinod Kumar, found that granting an injunction would delay the progress of the ambitious infrastructure project, thereby causing a national loss. The court highlighted the Specific Relief Act, 1963, which bars courts from granting injunctions that would impede or delay infrastructure projects.
The judgment arose from an appeal by NHAI against an interim order by a single judge, which had restrained NHAI from terminating the contract with Roadway Solutions India Infra Limited. The project in question involves a critical stretch of the Delhi-Mumbai National Expressway, where significant progress has already been made.
The court noted that while the contractor had mobilized resources and incurred considerable expenditure, it failed to meet the project milestones as revised in the third settlement agreement (SA-3) executed between the parties. Furthermore, the court dismissed the contractor's claims that land acquisition delays by NHAI were hindering progress, stating that acquisition proceedings had been completed and possession of the land had been taken.
In its ruling, the court allowed NHAI to issue a fresh tender for the project if necessary, while restraining it from encashing the contractor's bank guarantees until the disposal of the Section 9 application. The court expressed that the balance of convenience lies in favor of the nation and its citizens, who stand to benefit from the timely completion of the highway.
The decision underscores the judiciary's recognition of the importance of infrastructure development and the need to avoid judicial interference that could hinder project timelines. It also sets a precedent for prioritizing national interest in legal disputes involving public infrastructure projects.
Bottom Line:
Arbitration - Infrastructure Projects - Injunction restraining National Highways Authority of India (NHAI) from proceeding with termination of contract and issuing a fresh tender - Held, courts cannot grant injunctions that impede or delay infrastructure projects under Specific Relief Act, 1963 - Balance of convenience lies in favor of the nation and citizens for timely completion of infrastructure projects.
Statutory provision(s): Arbitration and Conciliation Act, 1996 Sections 9, 37(1)(b); Specific Relief Act, 1963 Sections 41(ha), 20A.
