Delhi HC asks NHAI to pay Rs 143 crore to PNC Infratech within 8 weeks

NHAI had in 2005 signed a contract with a joint venture of PNC Infratech Limited and Bhageeratha Engineering Limited for widening of NH-24 between Garhmukteshwar and Moradabad

Rejecting the National Highways Authority of India’s (NHAI) contention against an arbitral tribunal award, the Delhi High Court has asked the state-run agency to pay a sum of nearly Rs 143 crore to PNC Infratech Limited within eight weeks for causing delay in the widening of National Highway 24 between Garhmukteshwar and Moradabad.

NHAI had  in 2005 signed a contract with a joint venture of PNC Infratech Limited and Bhageeratha Engineering Limited (BEL) for widening of NH-24 between Garhmukteshwar and Moradabad as well as construction of a Road-Over-Bridge (ROB) for a total cost of Rs 221 crore. The project was scheduled to be completed in 2007. Owing to delays on account of NHAI failing to get the requisite clearances for the project, the road widening project was completed with a delay of 22 months, while the ROB was completed after a significant delay of 45 months.

The matter was later referred to an arbitral tribunal, which found NHAI guilty of breach of contract and awarded damages in favour of PNC. Though the project was started by a joint venture of PNC-BEL, BEL had later walked out of the project due to delay in payments from NHAI.

In its pleadings before the arbitral tribunal, PNC claimed that NHAI failed to make payments on the Interim Payment Certificates on time and delayed realignment of the NH as it passed through Hastinapur Wildlife Sanctuary, which caused the overall delay in the work. While NHAI claimed that the delay was caused as the PNC-BEL joint venture did not get the requisite permissions for cutting of trees and removing of encroachments, the arbitral tribunal ruled that only these could not be the reasons for the delay of the project.

The high court, while agreeing with the findings of the arbitral tribunal, asked NHAI to release the sum along with the interest accrued on it to to PNC within 8 weeks.

“The arbitral tribunal had allowed PNC claim to a tune of Rs 104 crore. Once interest is included, the total claim comes to Rs 142 crore. Through this award, the high court has recognised that the delay in handing over of Right-of-Way was in fact caused by NHAI and thus is a breach of contract,” said Manoj K Singh, founding partner at Singh & Associates and advocate for PNC.