Court restrains NHAI on contract termination

March 2nd, 2012 - 12:02 am ICT by IANS  

New Delhi, March 1 (IANS) The Delhi High Court Thursday extended the stay on the National Highways Authority of India’s (NHAI) decision to terminate the Delhi-Gurgaon Super Connectivity Ltd’s (DGSCL) contract to operate the expressway between the capital and the Haryana city.

A bench of Justice S. Muralidhar said that the court’s earlier order, restraining the NHAI from taking further action against DGSCL will remain till March 27.

The order of the court came on the plea of DGSCL seeking direction to restrain the highways authority from taking any coercive action against it.

The relation between the two parties turned sour after the NHAI accused DGSCL of fraud in the form of refinancing the project without getting its approval.

The highways authority, while ordering termination of its deal with the private firm, had accused it of failure to improve services at the 32-lane toll plaza.

The DGSCL had approached the Delhi High Court after the NHAI had issued a preliminary termination notice to it on Dec 7 last year.

Meanwhile, seeking stay on the termination notice, the Infrastructure Development Finance Company Bank, has moved the Delhi High Court, stating that the termination of the contract to operate the toll plaza with DGSCL will cause a huge financial loss to it.

The bank had provided credit facility to the tune of Rs.1,597 crore to DGSCL for its 28-km road project.

IDFC has contended that NHAI violated the tripartite agreement it had signed with the DGSCL and the government.

The bench has posted the matter for further hearing March 27.

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