Delhi High Court
Srinagar Banihal Expressway ... vs National Highways Authority Of ... on 26 March, 2021
$~28
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 26.03.2021
+ W.P.(C) 4034/2021
SRINAGAR BANIHAL EXPRESSWAY LTD. .... Petitioner
Through: Mr. Sandeep Sethi, Sr. Adv. &
Mr. Rajeev Mehra, Sr. Adv.
with Mr. Amar Gupta, Mr.
Divyam Agarwal, Ms. Pallavi
Kumar & Mr. Anuj Aggarwal,
Advs
versus
NATIONAL HIGHWAYS AUTHORITY OF INDIA & ANR.
..... Respondents
Through: Ms.Gunjan Sinha, Adv. for R-1.
Mr.Kapil Arora, Adv. for R-2.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
NAVIN CHAWLA, J. (Oral)
CM No.12197/2021 (Exemption)
Allowed, subject to all just exceptions.
WP(C) 4034/2021 & CM 12196/2021
1. Issue notice.
2. Notice is accepted by Ms.Gunjan Singh, Advocate on behalf of
the respondent no. 1 and Mr.Kapil Arora, Advocate on behalf of the
respondent no. 2.
W.P.(C) 4034/2021 Page 1
3. Let counter affidavit be filed within a period of four weeks.
Rejoinder, if any, be filed within a period of three weeks thereafter.
4. It is an admitted case of the petitioner that the Notice Inviting
Tender for the balance work of petitioner's contract was issued by the
respondent no.1 on 14.07.2020. Prior thereto, the respondent no.1 had
issued a notice dated 22.05.2020 to the petitioner informing it as
under:
"Accordingly, Concessionaire is hereby called
upon for remedying the aforesaid defaults no
later than the period as specified in the
Concession Agreement, from the date of
receipt of this notice, failing which the
Authority shall be constrained to exercise its
rights under the relevant clauses of the
Concession Agreement and including issuing
the separate tender on standalone basis for
completing the balance work of Rs 142 Cr.
Overriding powers of the Authority
under Clause 17.10.1 states that if in the
reasonable opinion of the Authority, the
Concessionaire is in material breach of
its obligations under this Agreement and
in particular, the Maintenance
Requirements, and such breach is
causing or likely to cause material
hardship or danger to the Users, the
Authority may without prejudice to any
of its rights under this Agreement
including Termination thereof, by notice
require the Concessionaire to take
reasonable measures immediately for
rectify."
W.P.(C) 4034/2021 Page 2
5. The petitioner and the respondent have been corresponding
thereafter on the plea of the petitioner that the petitioner be allowed to
complete the balance work at the rates offered by the respondent no.2.
Initially, the respondent no.1 was agreeable to the said offer and called
upon the petitioner to sign the necessary MoU/Tripartite Agreement
with including its lenders. It is not denied by the petitioner that such
MoU/Tripartite Agreement could not be executed by it due to disputes
between the petitioner and the lenders. It has also come on record that
the lenders have moved the learned Debts Recovery Tribunal and the
learned National Company Law Tribunal for recovering the amounts
due to them from the petitioner.
6. By the letter dated 04.02.2021, the respondent no.1 called upon
the petitioner to inter alia show credible evidence of availability of
required funds for completion of the balance work. It is the say of the
respondent no.1 that in spite of the opportunity granted, the petitioner
was unable to do the same. In this regard, the respondent no.1 is also
relying upon the letter dated 01.03.2021 of the Independent Engineer.
7. The learned counsel for the respondent no.1 submits that the
project was in fact to be completed within 90 days of 02.04.2018, and
has already been considerably delayed, leaving respondent no.1 with
no option but to execute the agreement with the respondent no.2 for
completion of the balance work. In fact, the agreement with the
respondent no.2 has already been executed on 23.03.2021.
8. The learned senior counsel for the petitioner has placed reliance
on Article 37.1.3 of the Concession Agreement to submit that for
W.P.(C) 4034/2021 Page 3
awarding the balance work to a third party, the respondent no.1 was to
first issue a notice intending to terminate the Concession Agreement
and seek the view of the lenders for entering into such contract with
the third party. He submits that in the present case, there is no notice
issued by the respondent no.1 of its intent to terminate the Concession
Agreement and therefore, the respondent no.1 cannot execute such
Agreement with the respondent no.2.
9. Article 37.1.3 of the Concession Agreement reads as under:
"37.1.3 The Authority shall, if there be
Senior Lenders, send a copy of its notice of
intention to issue a Termination Notice
referred to in Clause 37.1.2 to inform the
Lenders' Representative and grant 15 (fifteen)
days to the Lenders' Representative, for
making a representation on behalf of the
Senior Lenders stating the intention to
substitute the Concessionaire in accordance
with the Substitution Agreement. In the event
the Authority receives such representation on
behalf of Senior Lenders, it shall, in its
discretion, either withhold Termination for a
period not exceeding 180 (one hundred and
eighty) days from the date of such
representation or exercise its right of
Suspension, as the case may be, for enabling
the Lenders' Representative to exercise the
Senior Lenders' right of substitution in
accordance with the Substitution Agreement:
Provided that the Lenders' Representative
may, instead of exercising the Senior Lenders'
right of substitution, procure that the default
specified in the notice is cured within the
aforesaid period of 180 (one hundred and
W.P.(C) 4034/2021 Page 4
eighty) days, and upon such curing thereof, the
Authority shall withdraw its notice referred to
above and restore all the rights of the
Concessionaire.
Provided further that upon written request
from the Lenders' Representative and the
Concessionaire, the Authority shall extend the
aforesaid period of 180 (one hundred and
eighty) days by such further period not
exceeding 90 (ninety) days, as the Authority
may deem appropriate."
10. Prima facie the above clause of the Concession Agreement
appears to be for the benefit of the lenders. Evidently, the lenders are
not protesting against the execution of the Agreement between the
respondent no.1 and the respondent no.2. In fact, as per the case of the
petitioner itself, the lenders have not cooperated with the petitioner for
the execution of the balance work by it.
11. I may also note that the learned counsel for the respondent no.1
has placed reliance on Article(s) 17.10, 36.1 and 36.2 of the
Concession Agreement to submit that the respondent no.1 is entitled to
get the balance work completed through a third party without resorting
to the termination process. This is denied by the learned senior counsel
for the petitioner who submits that these Articles are applicable only
to the operation and maintenance phase of the Concession Agreement.
12. In my view, due to the facts which have been enumerated
hereinabove and the agreement having already been executed between
the respondent no.1 and respondent no.2, no case for an ad interim
injunction is made out by the petitioner at this stage.
W.P.(C) 4034/2021 Page 5
13. List on 20th May, 2021 before Roster Bench.
NAVIN CHAWLA, J
MARCH 26, 2021/rv/ns/P
W.P.(C) 4034/2021 Page 6
