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2017 (10) TMI 1582 - HC - Indian LawsExecution of work relating to by-pass pertaining to time period - Termination Payment on account of default by the Concessionaire - deductions on account of NHAI's claims or that the recoveries or adjustments - HELD THAT:- Termination payment under clause 37.3.1 is not payable to the Concessionaire for the Concessionaire's default occurring prior to COD. The expression "COD" has been defined in the definition clause of the Concessionaire Agreement as "Commercial Operation Date", which has its meaning as set forth in clause 15.1. Clause 15.1 stipulates that four-laning shall be deemed to be complete when completion certificate or provisional certificate, as the case may be, is issued under the provisions of Article/clause 14 and accordingly the Commercial Operation Date of the project shall be the date on which such completion certificate or provisional certificate is issued. The Concessionaire is entitled to collect fee and receive payments in accordance with the Article/clause 27 of the Concessionaire Agreement after issue of COD. It is clear from the reading of the definition that the expression the "debt due" refers to the principal amount of debt provided by the Senior lender under the Financing Agreement but excluding any part of the principal that had fallen due for repayment two years prior to the transfer date. The principal amount should be for financing the Total Project Cost. It also includes aggregate interest, financing fees, and charges which had fallen due within one year prior to the transfer date and excludes penal interest and other charges and also pre payment charges on accelerate payments. Thus, there is specific and clear-cut definition of the "debt due" which would become payable under clause 37.3.1 of the Concession Agreement. We would have to reject the contention of the appellant, NHAI that for the purpose of Clause 37.3.1 interest component of ₹ 19.4 crores or recoveries of ₹ 242.42 crores can be adjusted. This is impermissible and not what is stated and permitted under Clause 37.3.1 or under expressions Debt Due or Total Project Cost - we do not think that the appellant NHAI can make adjustment on account of the recoveries which it claims are payable by JSTL, or exclude accrued interest of ₹ 19.4 crores on account of alleged willful default by JSTL. The said adjustment being impermissible and not as per the mandate of the clauses mentioned above, are unsustainable. The impugned order takes care of the interest of NHAI as it directs furnishing of an unconditional, irrevocable bank guarantee in favour of the NHAI for an amount not exceeding ₹ 348.604 crores and only upon the said guarantee being furnished deposit of the same figure is to be made in the escrow account. The bank guarantee is subject to final award of the arbitral tribunal. The impugned order also notices the adverse impact and the consequences which JSTL would suffer in case of non-deposit of the termination payment in the escrow account, which would have the effect of declaring the account of JSTL as non-performing asset which would amount to irreparable loss and injury. Appeal dismissed.
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