High Court backs NHAI’s move to terminate Pune co’s Delhi-Mumbai expressway contract over project delay

The Delhi High Court has cleared the way for the National Highways Authority of India (NHAI) to terminate a major construction contract on the Delhi-Mumbai Expressway, ruling that public interest should take precedence, The Times of India reported on January 16. According to ToI’s report, the court said that citizens cannot be denied access to a properly constructed highway due to long delays and allowed NHAI to appoint another agency to complete the 35 kilometers of the stalled road (by Dipak K Dash and Abhinav Garg).

A bench comprising Justices Dinesh Mehta and Vinod Kumar strongly endorsed the authority’s position, arguing that the “balance of convenience” lies squarely with the nation and road users. Smooth and free movement of vehicles is a fundamental public requirement and a private contractor cannot compromise due to slow implementation, the judges said.

The decision pertains to the 35-km section of the Delhi-Mumbai Expressway given to Pune-based Roadways Solutions India Infra Ltd (RSIIL). NHAI had notified its intention to terminate the contract on December 23 after significant delays in construction were recorded. RSIIL challenged the notification before a single-judge bench, which stayed the termination and led NHAI to file an appeal in the Supreme Court.

Allowing NHAI’s appeal, the division bench rejected the contractor’s contention that it would take at least three months to issue a fresh tender and could still show adequate progress. The court said NHAI was free to act in public interest and ensure timely completion of the project.

At the same time, the court offered limited interim protection to the contractor. It restrained NHAI from encashing the insurance surety bonds and bank guarantees provided by RSIIL until the contractor’s application was finally decided by the single judge bench. However, this measure does not prevent NHAI from taking administrative steps to change the contractor.

The Supreme Court, in its order, made it clear that NHAI may issue appropriate orders as per its notification dated December 23 and issue a fresh notification inviting tenders for Package VIII of the expressway, if deemed necessary. The authority was also allowed to engage another agency or organization to complete the remaining work in the affected area.
The case highlighted wider concerns about delays on parts of the ambitious Delhi-Mumbai Expressway, which is estimated to cost around Rs 1 lakh crore. RSIIL has signed three contracts covering a total of 87 kilometers on the Gujarat stretch of the highway. According to NHAI, progress has been slow in these parts. Solicitor General Tushar Mehta, speaking on behalf of NHAI, told the court that the contractor’s failure to complete the work had a direct impact on the drivers. Due to incomplete sections, vehicles traveling on the newly built highway are forced to detour, undermining the purpose of the high-speed corridor.

NHAI is likely to issue treatment period notifications for two other areas built by RSIIL where progress is delayed, say officials familiar with the matter. The cure period notice gives the contractor 60 days to correct violations or delays before the authority initiates formal termination proceedings.