SC stays NHAI's termination notice
SC has stayed the National Highway Authority of India's notice that terminated a Rs 30.35 crore contract to Uttar Pradesh State Bridge Corporation (UPSBC).business Updated:
The Supreme Court has stayed the National Highway Authority of India's notice that terminated a Rs 30.35 crore contract to Uttar Pradesh State Bridge Corporation (UPSBC).
A bench headed by Chief Justice KG Balakrishnan stayed UPSBC's expulsion from the contract last week. The bench also issued a notice seeking an explanation from NHAI as to why the contract awarded to UPSBC for construction of a bridge across river Tapi in Ahmedabad-Bombay section in Surat, Gujarat, should be cancelled.
UPSBC had sought a stay on the termination of the contract and encashment of the bank guarantee furnished by it to NHAI on the ground that the project could not be completed within the stipulated time due to reasons beyond its control.
Blaming unprecedented floods and hard rocks for the situation despite deployment of sufficient resources and men, the petition filed through counsel Arvind Munich said the company was already paying NHAI liquidated damages at the rate of Rs 50,000 per day since September 2005.
While seeking quashing of the Gujarat High Court's orders that directed the Authority to take appropriate action for completion of work or cancel the contract, UPSBC said these directions were contradictory and would prejudice it in its arbitration case. This would deprive it of its right to prove that the termination was illegal, the company said.
While NHAI had moved the High Court for expediting the construction of the bridge, UPSBC had approached a lower court seeking stay on the encashment of the bank guarantee and termination of the contract.