HC dismisses petition against termination of Kohima-Jessami 2-lane road contract

KOHIMA— The Kohima Bench of Gauhati High Court has dismissed the writ petition filed by M/s Stroyproekt LLC OIA JV against the National Highways and Infrastructure Development Corporation Limited (NHIDCL), over the termination of contract agreement and floating of a new tender for the Kohima-Jessami two-lane road project, stating that it was done “in public interest”.

The court pronounced its decision on Friday, five days after it concluded the hearing on the matter and ‘reserved the judgement’.

The matter was in regard to the construction of Kohima-Jessami two-lane road (hard shoulder) on the NH-29 from existing km 98.380 (near Chizami nillage) to existing km 120.367 (Nagaland/Manipur Border) under Bharatmala Pariyojna on EPC Mode Package V, which was earlier awarded to Stroyproekt LLC OIA JV.

In a judgment passed on Friday, the court stated that it is “apparent on record that the decision making process in terminating the Contract work was based on proper assessment of work progress and appreciation of the circumstances that had an impact on the delay in completion of the work, which involves public interest at large”.

“In other words, the award of the Contract to the petitioner for construction of public road (National Highway) in a state like Nagaland was in public interest and the termination of the said Contract awarded to the petitioner was also in public interest where no interference of this Court in exercise of the extraordinary jurisdiction under Article 226 of the Constitution of India by way of review is warranted,” Justice Ajit Borthakur stated in the order.

Dismissing the case, the court added that the interim order passed earlier stands vacated and disposed of the writ petition.

The Stroyproekt-OIA JV, a Joint Venture Company (EPC Contractor), and the NHIDCL entered into an agreement on May 29, 2020, for the construction of two-lane with hard shoulder along Kohima-Jessami road (NH-29) from existing km 98.380 (near Chizami Village) to existing km LZA367 (Nagaland Manipur Border) under Bharatmala Pariyojna on EPC Mode (Package V).

The contract was initially agreed to be completed within a period of 18 months from the appointed date. However, the petitioner sought for Extension of Time (EOT-I, II) for two times — initially for six months and the 365 days for the second time, both the letters of which were recommended by the authority engineer.

However, despite the recommendation of the authority engineer to extend the time, the NHIDCL unilaterally declared the petitioner as a non-performer. Even after declaring the petitioner as a non- performer, the project manager of the respondent, recommended granting extension of time till March 29, 2023. Despite the project manager’s recommendation, the respondent issued Cure Notice for a period of 60 days to the petitioner.

The petitioner on Dec 5, 2022 submitted the request for EOT-III to the respondent, to which the authority engineer recommended with project completion date extended to July 4, 2023.

However, without even considering the petitioner’s request for EOT-III, the respondent published request for proposal on March 5.

On March 1, the respondent, the authority engineer and the petitioner agreed upon another extension of time for a period of one month to achieve a DBM length of 5 km in the month of March.

But the respondent had on March 15 issued letter of termination to the petitioner citing contractual defaults, breaches and willful non-performance as well as noncompliance of various notices and instructions of the authority/authority engineer in writing and failure to achieve the progress in accordance with the contract agreement. 

Aggrieved by the termination of contract by the NHIDCL, the company filed writ petition in the High Court on April 1, to which the court had concluded the hearing on June 19.

Also read: High Court reserves judgement on Kohima-Jessami 2-lane road case