Delhi High Court Dismisses NHAI's Plea Against Arbitral Award of Over Rs 54 Crore to PNC Infratech

New Delhi, Jun 9: The Delhi High Court has dismissed a petition filed by the National Highways Authority of India (NHAI) challenging an arbitral award of over Rs 54 crore granted in favour of PNC Infratech Ltd for delay in the widening of National Highway-24 between Garhmukteshwar and Moradabad in Uttar Pradesh.

Justice Navin Chawla said there was no merit in the petition filed by the NHAI.

The judge also noted that the NHAI, in compliance with the court's January order, had deposited the awarded amount in the court. He said subject to any other order being passed by a competent court, the deposited amount, along with interest, be released in favour of PNC after eight weeks.

The arbitral tribunal, in its 2018 order, had said, "Therefore, we allow the present sub-claim as regards compensation for loss of overheads and profits. However, the aforementioned claim being awarded is restricted to Net Loss incurred at the end of 24 months i.e. Serial No. 6 of Claim Chart and Net loss incurred in the extended period i.e. Serial No. 12 of Claim Chart only, which amounts to Rs 54,28,76,972.00/- (mentioned under Serial No. 13 of Claim Chart).

Accordingly, the amounts mentioned thereafter, permitting to period of ROB works, for a total amount of Rs 29,25,797.00/-, are hereby rejected."

The NHAI and a joint venture of PNC Infratech Limited and Bhagheeratha Engineering Limited (BEL) had entered into an agreement in February, 2005 for the project of widening and strengthening of NH-24 from Km 93 to Km 149.25 to four-lane standards (Garhmukteshwar to Moradabad), a Road Over Bridge (ROB) at Km 181 of NH-24 and bridges on NH-87 in Uttar Pradesh. BEL had later walked out of the project.

The contract price was Rs 221.42 crore. The date of commencement of work was March 31, 2005 and it was scheduled to be completed by September 30, 2007.

The road-widening project was completed in July 2009, after a delay of 22 months, while the ROB was completed after a delay of almost 45 months.

PNC had claimed that the delay in the execution of the work was caused due to the NHAI's failure to give unhindered and un-obstructed possession of the site for road work and structures.

Regarding the amount awarded by the tribunal, Manoj K Singh, founding partner at Singh and Associates and the lawyer for PNC, said, "The arbitral tribunal allowed the claim to the extent of approximately Rs 109 crore. After including interest, the amount goes to approximately Rs 142 crore."

The arbitral tribunal, in its September 20, 2018 order, had found the NHAI guilty of causing delay in the execution of the work. The NHAI had claimed that PNC had failed to discharge this responsibility and therefore, could not have claimed that the state-run agency was at default for allegedly not giving unhindered access to the site.

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