Jhansi Orai Tollway Pvt. Ltd v. Union of India & Ors

RAJIV SAHAI ENDLAW, J OCTOBER 09, 2015 "bs"..

*IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 9th October, 2015 + JHANSI ORAI TOLLWAY PVT. LTD. ..... Petitioner Through: Mr. Garvesh Kabra and Mr. A.H. Lohiya, Advs. Versus UNION OF INDIA & ORS ..... Respondents Through: Ms. Anjana Gosain and Mr. Vishu Agarwal, Advs. for R-1/UOI. Mr. Ravi Sikri, Sr. Adv. with Mr. Mukesh Kumar, Ms. Meenakshi Sood, Mr. Shantnu Awasthi and Mr. Binay Kumar Thakur, Advs. for R-2/ NHAI. CORAM:- HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW CMs No.22828/2015 & 22829/2015 (both for exemption) 1. Allowed, subject to just exceptions. 2. The applications are disposed of. W.P.(C) NO.9628/2015 & CM No.22827/2015 (for stay) 3. The petition impugns the letter dated 3rd March, 2014 of the respondent No.2 National Highways Authority of India (NHAI) of termination of the Concession Agreement dated 5th February, 2013 entered into between the petitioner and the respondent No.2 NHAI for operation and maintenance of Jhansi-Orai section stretch admeasuring 135.413 Km. of NH-25 in the State of Uttar Pradesh on Operation Management Transfer (OMT) basis. 4. The petition impugning the termination dated 3rd March, 2014 has come up for the first time today before this Court. It is the case of the petitioner that the petitioner was not aware of the said termination and has been informed of the same for the first time only on 22nd July, 2015 and the copy of the letter dated 3rd March, 2014 has been furnished to the petitioner on 11th September, 2015. 5. The counsel for the petitioner has been heard. 6. It is not in dispute that within sixty days of the execution of the said Concession Agreement, the petitioner was required to furnish a Performance Security to the respondent No.2 NHAI. Clause 9.1.2 of the Concession Agreement is as under: "9.1.2 Notwithstanding anything to the contrary contained in this Agreement, in the event Performance Security is not provided by the Concessionaire within a period of 60 (sixty) days from the date of this Agreement, the Authority may encash the Bid Security and appropriate the proceeds thereof as Damages, and thereupon all rights, privileges, claims and entitlements of the Concessionaire under or arising out of this Agreement shall be deemed to have been waived by, and to have ceased with the concurrence of the Concessionaire, and this Agreement shall be deemed to have been terminated by mutual agreement of the Parties." 7. It is also not in dispute that the petitioner within the said period of sixty days did not furnish the Performance Security. 8. It is the case of the petitioner that the said period of sixty days was extended to 180 days with effect from 14th May, 2013 in terms of the Circular dated 29th May, 2013 of the respondent No.2 NHAI. 9. However, the fact remains that the petitioner did not furnish the Performance Security even within the said extended period of 180 days and which resulted in the respondent No.2 NHAI issuing a termination notice dated 18th February, 2014 to the petitioner and relevant paragraphs whereof are as under: "Whereas, in term of clause 9.1.2 of the Concession Agreement the Concessionaire viz Jhansi-Orai Tollway Pvt. Ltd. was required to provide Performance Security within a period of 60 days from 5th February, 2013. Whereas, the due date for submission of Performance Bank Guarantees has expired on 4th April, 2013 but the Concessionaire has failed to comply with its contractual obligation despite giving additional time to submit the Performance Bank Guarantee. The Concessionaire continues to be in breach of its contractual obligations by not submitting the Performance Bank Guarantee. Whereas after execution of the Concession Agreement, submission of Performance Bank Guarantee was one of the essential and foremost steps to be undertaken by the Concessionaire as a mark of commitment to undertake the project work which the Concessionaire is no more interested and has no intention to undertake the project work. Whereas upon failure of the Concession