Jetpur Somnath Tollways Limited vs. National Highways Authority Of INDIA
Held
The Court acknowledged the petitioner's predicament regarding the increased charges from PNB, noting that the communication from the bank confirmed the substantial rise in costs. However, the Court agreed with the NHAI that the issue of bank charges was primarily a matter between the petitioner and PNB, and the NHAI was not responsible. Despite this, the Court aimed to provide some flexibility to ensure the interim arrangement established on July 31, 2017, continued to function. The Court directed that the NHAI could trigger the bank guarantee, but PNB would not act on the invocation for four weeks. If the petitioner failed to extend the bank guarantee's validity within this period, PNB was to remit the invoked amount to the NHAI, provided the invocation was otherwise in order. These directions were to be governed by the Court's order dated July 31, 2017.
Facts
The petitioner, Jetpur Somnath Tollways Limited, sought an extension of time to extend a bank guarantee, which was due to expire on August 9, 2019. The original order directing the bank guarantee was passed on July 31, 2017, in O.M.P. (I) (Comm.) 221/2017 and O.M.P. (I) (Comm.) 227/2017. The petitioner's bank, Punjab National Bank (PNB), had suddenly increased its commercial charges from 1% to 3%, leading to a significant increase in the annual burden from Rs. 4.10 crores to Rs. 12.10 crores. The bank also claimed processing charges and GST. The respondent is the National Highways Authority of India (NHAI).
Key Issues
1. Whether the petitioner should be granted an extension of time to extend the validity of the bank guarantee, considering the increased charges imposed by the bank. Petitioner's arguments: The petitioner argued that the sudden and substantial increase in commercial charges by PNB, from 1% to 3%, along with additional processing charges and GST, made it difficult to extend the bank guarantee within the original timeframe. The increased annual burden rose from Rs. 4.10 crores to Rs. 12.10 crores, with advance commission payments required. They relied on the communication from PNB dated August 7, 2019, detailing these increased costs. Respondent's arguments: The NHAI contended that the issue of increased bank charges was a matter between the petitioner and PNB, and the NHAI could not be held accountable. The petitioner was obligated to fulfill the conditions stipulated in the Court's order dated July 31, 2017.
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O R D E R %
2019 I.A. No.10877/2019 1 Allowed, subject to just exceptions. I.A. No.10876/2019 2 Issue notice. Ms. Neetica Sharma accepts notice on behalf of the non-applicant/NHAI. Learned counsel says she does not wish to file a reply and would like to argue the matter on the basis of record available with the Court. 3 The substantive prayer made in the application is as follows:- “(a) grant the Petitioner 4 months time to extend the Bank Guarantee for a period of one year i.e. upto 9.8.2020 from the date of this Hon'ble Court's Order or any such period as may be deemed fit and / or proper by this Hon'ble Court.”
O.M.P.(I) (COMM.) 221/2017 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Ord
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