Major setback to NHAI: Delhi HC directs it to pay Rs 142 crore to JV

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Updated: June 6, 2019 4:29:02 AM

Pursuant to the HC’s directions, the NHAI had deposited the award money in the court on January 25.

NHAI, Delhi High Court, PNC Infratech, PNC-BEL JV, Uttar PradeshJustice Navin Chawla, while dismissing the NHAI’s appeal against last September’s arbitral award, asked the authority to release the award money of Rs 142 crore to PNC-BEL (JV) by mid-July.

In a major setback to the NHAI, the Delhi High Court has upheld an arbitral award that asked it to pay Rs 142 crore to PNC-BEL (JV), a joint venture of PNC Infratech (PNC) and Bhageeratha Engineering. Justice Navin Chawla, while dismissing the NHAI’s appeal against last September’s arbitral award, asked the authority to release the award money of Rs 142 crore to PNC-BEL (JV) by mid-July.

Pursuant to the HC’s directions, the NHAI had deposited the award money in the court on January 25. “Subject to any other order being passed by a competent court, the deposited amount with interest accrued thereon be released” in favour of the JV, the judge stated in its May 24 order.

The HC while rejecting NHAI counsel Ramesh Kumar’s stand stated that “the arbitral tribunal found that there were delays in form of realignment being ordered over a period of time; delay in making payments of IPCs; delay in grant of EOT in a timely manner and so on. Therefore, even assuming that the NHAI is right in its submission that delay in removal of trees, shifting of utilities, removal of encroachments, etc is attributable to the respondent (JV), this alone would not make the respondent guilty of causing delay in the execution of the work. The same would also not be sufficient to interfere with the award.”

Disputes had risen between NHAI and the contractor over a Rs 221-crore contract granted in 2005 for widening and strengthening of NH24 from Km 93.00 to Km 149.25 to four lane standards (Garhmukteshwar to Moradabad) and ROB at Km 181 of NH24 and bridges on NH87 in Uttar Pradesh (Package-II).  While there was a delay in completion of work and no extension of time was given, the contractor had sought consequential damages suffered by it.

The dispute was referred to the arbitral tribunal, which in September last year held the NHAI responsible for causing delay in execution of work and awarded around Rs 104 crore excluding interest to the joint venture. The NHAI had challenged the arbitral award before the HC.

On allegation over delay in completion of work, PNC-BEL(JV) through its counsel Manoj K Singh told the HC that it was the NHAI which had delayed the project on various counts like late handing over of unhindered and unencumbered possession of the site, change of alignment, failure to coordinate with authorities on cutting of trees, delay in providing drawings, delay in approving the extension of time requests, etc. The tribunal had agreed with the contractor that such change in the alignment at a belated stage was akin to not handing over the stretch until the later date.

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