NEW DELHI: Irked by the number of development schemes—which are high on the PM’s agenda—getting shelved owing to injunctions, the Narendra Modi government is ready with an amendment that bars the courts from issuing interim stays.
The latest irritant for the government was the National Green Tribunal stay, issued on January 2, on the Pune Metro proposal, just days after Modi performed the bhoomi pujan. While the Supreme Court vacated the NGT order on January 21, the government is set to amend the Specific Relief Act, drawing a laxman rekha for courts dealing with cases pertaining to public works contracts.
The government note, reviewed by The Sunday Standard, contains the new section, 14 A, seeking to restrict the power of courts to grant injunctions THAT impede or delay the timely completion of welfare projects. The draft will go to the Cabinet for approval, after which it will be introduced in Parliament when it opens on March 9.
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Section 14 A intends litigation not to halt the progress of infrastructure projects. Leaving no scope for interpretation, the amendment also seeks to specifically define “public works contract” by altering Section 2 of Specific Relief Act. “Public works contract means a contract entered into by or on behalf of the Central government, a state government, a local self government or an agency thereof, for the creation, upgradation, operation or maintenance of infrastructure, including roads, water supply, electricity, sewerage treatment, construction of public buildings, highways, bridges, ports, schools, airports, urban development and railways,” the note reviewed by this newspaper said.
Government sources said corporate rivalry and tussles between governments and investors cause projects to be challenged in courts. By the time a case is decided, there is a cost escalation of the scheme by ten times in the majority of cases. The bar on injunction could apply even at the stage of the tendering process.
The Narendra Modi government is adding a new section, 14A, to The Specific Relief Act in an amendment seeking to restrict the power of judiciary. If passed in Parliament, courts will no longer be able to grant injunctions, which may impede or delay the timely completion of welfare projects.
“Intent of the proposed law is to get the work done rather than compensation. The existing law was giving discretionary power to the court for remedies concerning breach of contract. The discretion is sought to be regimented through amendments which will ensure that even in cases where contract cannot be performed, the project remains alive at the cost of the defaulter running away from the agreement,” sources further added.
In line with the government’s development agenda, more amendments may be brought to apply to other provisions of the Specific Relief Act to deter parties choosing not to fulfill their contract obligations. The government will insert a new section, 20A, in the Act to allow a contract to be finished by a third party at the original contractor’s expense if the latter decides to abandon a project halfway. The note said, “Insertion of a new section 20A, to provide for a new relief of compensation for substituted performance of contract, so that the promisee (a party to the contract) who suffers from breach of contract performed through substituted performance by a third person at the cost and expense of the promisor (defaulter) committing such breach.”
Since courts lack technical expertise, the amendment will empower them to seek the help of experts to assist.
Under the existing law, the courts grant monetary compensation in exceptional circumstances. The government note argues that such remedies are not available to the parties as a matter of right, being entirely at the discretion of the court. “Where the legal system prefers compensatory relief, the promisor (defaulter/ contractor) has an incentive to break his contract if such course of action is more beneficial to him than performing it (completing the project).”