Jharkhand High Court
The Court On Its Own Motion vs . on 23 August, 2018
Author: Aparesh Kumar Singh
Bench: Aparesh Kumar Singh, Anil Kumar Choudhary
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P. (PIL) No. 3503 of 2014
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The Court on its Own Motion Versus.
1. The Union of India through its Secretary, Ministry of Road Transport And Highways, New Delhi
2. The Union of India represented by its Secretary, Ministry of Environment and Forest, New Delhi
3. The National Highways Authority of India represented by its Chairman
4. The State of Jharkhand through Principal Secretary, Road Construction Department, Govt. of Jharkhand
5. Principal Secretary, Department of Forest and Environment, Govt. of Jharkhand
6. Chief Executive Officer, Municipal Corporation, Ranchi
7. Subha Jha
8. Arbind Kumar Jha
9. Narendra Mishra
10. Ranchi Express Limited, Hyderabad
11. D.G,M., M/s Canara Bank, Prima Corporate Branch, Secunderabad, Telangana State
12. Ministry of Corporate Affairs through its Secretary, Govt. of India
13. The Serious Fraud Investigation Office through its Director under the Ministry of Corporate Affairs, Govt. of India
14. Ministry of Surface Transport & Highways through its Secretary,Govt. of India
15. Central Bureau of Investigation through its Director --- Respondents With W.P.(PIL) No. 2470 of 2015
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The Court on its Own Motion Versus The State of Jharkhand & others
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CORAM: Hon'ble Mr. Justice Aparesh Kumar Singh Hon'ble Mr. Justice Anil Kumar Choudhary
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Amicus Curiae: Mr. Ashutosh Anand & Mr. Nipun Bakshi For the Resp - State: M/s Ajit Kumar, AG, Rajeev Ranjan Mishra, GP-II For the Res -NHAI: Mrs. Sweety Topno, Advocate For the Resp No. 10: M/s Parag Tripathy, Sr. Advocate, Anoop Kr. Mehta, Amitabh Chaturvedi, Apoorv Tripathi, Advocates For the Resp-Bank: M/s Jai Prakash, Sr. Advocate, P.A.S.Pati, Advocate
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59/ 23.08.2018 Reference may be made to the order dated 09.08.2018. An affidavit was filed by the Concessionaire (Respondent No. 10) thereafter on 13.08.2018 incorporating their stand. An affidavit has been filed today on behalf of NHAI which incorporates the decision taken by the Board of NHAI on 16.08.2018.
2. The background leading to the decision, as reflected in the opening paragraph of this affidavit need not be repeated here. In the background of the stand conveyed by the Respondent No. 10, as also reflected in the order dated 09.08.2018, the Authority did not find favour with the option of restoring the concession agreement after completion of the balance work, recover investment of NHAI along with interest from the annuity payable and then allow the Lenders / Concessionaire to recover whatever they could from the balance annuity. However, the Authority noted that the termination of the project may lead to endless litigation and Authority 2 could remain engaged with all sorts of litigation and claims / counter claims in respect of the project for an indefinite period. Keeping this in mind, the Authority has decided, as an alternative, to foreclose the Concession with an offer of One Time Settlement (OTS) of the matter. According to the OTS arrangement, the Authority would be agreeable to pay the amount of capital deployed in the project (i.e. value of work done on the project) as assessed and certified by the Independent Engineer as a full and final settlement. The amount so determined, would be paid under the project Escrow Account, apportionment of which may be settled between the Lenders and Concessionaire at their end. Lenders and Concessionaire would have no claim against NHAI whatsoever with this proposed settlement. In the event of acceptance of proposed OTS, a tripartite agreement would be executed among the parties. NHAI would execute the balance project work through separate EPC bids / contracts. If the settlement proposal is not acceptable to Lenders and / or Concessionaire, Authority would proceed with the termination of the Concession Agreement keeping in view that cure period notice issued earlier had not yielded any result and the lenders were not interested in substitution of the Concessionaire. Concessionaire would not be eligible to participate in the bids for the works to be taken in EPC mode or through any of its associates / subsidiaries. NHAI would proceed with execution of the balance project in EPC mode by creating as many packages as it feels appropriate in the interest of faster completion of the project.
3. View of the Respondent Bank and Concessionaire were sought on this proposal of NHAI today. Learned Senior Counsel representing the Bank reiterated the concern also reflected in the previous order that concession agreement should survive with the obvious intention to protect the interest of the Bank for realizing the public money expended by it towards the project. Learned counsel for the Bank has however reservation on the OTS proposal as no figure has been disclosed.
4. Learned Senior Counsel representing the Concessionaire has made elaborate arguments in his effort to weigh the pros and cons of the proposal. In substance, the concern of the Concessionaire is to protect the rights and remedies which could be ordinarily available to it under the terms of the concession agreement. It may have certain claims / counter claims which, if adjudicated, would determine the liabilities of the parties to the concession agreement which include NHAI as well. Acceptance of the OTS proposed by the NHAI would close all legal options available to it. Another concern of the Concessionaire is towards recovery of the bank's advances through annuities which could be possible only if the concession agreement survives and claims under it, are not extinguished in that fashion.
5. All the parties are conscious that any course which leads to further litigation, needs to be avoided keeping into mind the larger public interest for ensuring 3 execution of approximately 50% of the remaining work of NH-33. We have heard learned Advocate General for the State of Jharkhand as well.
6. Upon hearing all the parties on the intricacies involving execution of the remaining 50% of the work, we are of the view that at this stage, a workable solution has to be found out for execution of the four laning work of NH-33 in an expeditious and time bound manner in the larger public interest. Project delays often lead to complications which, if not resolved in true spirit, result in the project itself suffering for indefinite period of time leading to immense suffering to the public at large. As on date, about 50.24% of the work stands executed under the agreement dated 20.04.2011 where the stipulated period of completion was 04.06.2015. As such, the project has overrun and completed only half of the work more than three years after stipulated date of completion. The parties may have claims / counter claims against each other for non-completion of the balance work within the stipulated time. Rival claims of the parties however should not come into the way of execution of the remaining portion of the work. OTS Scheme has not been accepted unconditionally by the Bank and the Concessionaire. The option to terminate the agreement lies with the NHAI, but it is fraught with the risk of further litigations. Litigation may withhold or delay the execution of the remaining 50% of the work. Under OTS Scheme or earlier proposal submitted by the NHAI through its interlocutory application (I.A. No. 6613/2018), NHAI has shown its commitment to execute the remaining portion of the work. Rival claims / counter claims between the parties should not come into the way of executing the remaining 50% of the work.
7. Concessionaire on its part had conveyed its intent not to come in any way in execution of the remaining portion of the work under a proposal submitted by it on affidavit on 13.08.2018. The Bank which has made considerable advances towards execution of the project, also wants to protect its interest. However, for reasons attributable to any of the parties, upon which we do not intend to make any comment at this stage, the work remains incomplete till date. Parties may work out their rights and remedies over their claims only towards the executed portion of the work, as may be permissible under the terms and conditions of the agreement. This should not entitle them to withhold the execution of the remaining 50% of the work. As such, a solution can be worked out if parties are willing and ready. NHAI can go ahead with the execution of the remaining 50% of the work. It may not be required to enter into any One Time Settlement also. Parties would be free to raise their claims / counter claims in respect of the executed portion of the work, as per the terms and conditions provided under the agreement. Returns from execution of the remaining portion of the work could go to NHAI as per a structured mechanism e.g. collection from tolls. Adjudication on rival claims / counter claims of the respective parties on the 50% of the work already executed would determine their respective rights and 4 liabilities and the manner in which any dues could be recoverable, as per law. The agreement provides for Dispute Redressal Mechanism under which such claims / counter claims can be raised. This could be a viable solution if acceptable to the parties. It may avoid litigation in respect of execution of the remaining portion of the work. In case such a course is unacceptable, the option of termination of the agreement is always open to the NHAI.
8. Learned counsel representing the Bank and Concessionaire have, during course of the submissions, found reason with such a workable arrangement. Member (Project), NHAI Mr. Anand Kumar Singh while addressing the court, has sought indulgence to seek instructions from the competent authority under the NHAI. He has, at the same time, also discussed about the alternatives decided by the Board of NHAI on 16.08.2018, as taken note of in the foregoing paragraphs. Member (Project), NHAI, however, has at the same time, conveyed that the approach of NHAI is to avoid litigation in order to execute the project in an expeditious manner, may be by splitting the work in the remaining part of the work in several packages.
9. Learned Advocate General has stated that the deliberation between the representative of the State Government and the Member (Project), NHAI have led to a consensus that NHAI would execute Section I and II of Ranchi Ring Road project instead of splitting it from 163.5 km Ranchi-Rargaon-Mahulia main project. The state Government is only interested in timely execution of the remaining two phase of Ranchi Ring Road Project.
10. We expect NHAI, the Respondent lead Bank (Canara Bank) and Respondent No. 10 Concessionaire to comeforth with their respective stand in the matter so that execution of the remaining portion of the project is completed in a time bound manner. We, at the same time, make it clear that the aforesaid observations should not in any way, be considered to believe that any other option are closed, neither should be it considered as an expression of final opinion in the matter. This court however would not be constrained to take any appropriate decision in the matter keeping into light the larger public interest.
11. As prayed by the learned counsel for the parties, let the matter appear on 29.08.2018 at 2.15 pm as unfixed case.
(Aparesh Kumar Singh, J) (Anil Kumar Choudhary, J) Ranjeet/smita