Telangana HC orders HMDA to deposit 50 per cent of Rs 180 crore award

The bench was hearing a commercial court appeal filed by the HMDA against the award to the contractor by the arbitral tribunal.
Telangana High Court. (Photo | Wikimedia Commons)
Telangana High Court. (Photo | Wikimedia Commons)

HYDERABAD: A bench of the Telangana High Court, comprising Chief Justice Alok Aradhe and Justice NV Shravan Kumar, on Tuesday directed the Hyderabad Metropolitan Development Authority (HMDA) to deposit 50% of the Rs 180.39 crore, plus interest, due to a contractor under an award dated February 27, 2019, within six weeks. The bench was hearing a commercial court appeal filed by the HMDA against the award to the contractor by the arbitral tribunal.

The tribunal had earlier ruled in favour of Cyberabad Expressway Ltd (the contractor) and directed the HMDA to pay the contractor Rs 180.39 crore, along with simple interest at a rate of 12% per annum. The tribunal also said that in case the amount, along with interest, is not deposited within four months, interest shall be accrued on the principal amount at a higher rate of 15% per annum.

Senior counsel Ratan K Singh, representing the HMDA, argued that the award had been granted against the express provisions outlined in clause 6.2 of the concession agreement dated August 17, 2007. Counsel also highlighted an independent engineer’s report, stating that bonuses could only be granted if the project was completed within the originally scheduled date of completion, which was June 19, 2010. He said that the project was completed on March 30, 2012. The delay, according to HMDA, was attributed to the contractor. The HMDA urged the court to stay the operation of the award pending the outcome of the appeal.

Countering this, senior counsel A Venkatesh, representing the contractor, contended that his client had invested Rs 180 crore in the project and was entitled to an annuity on this investment, as determined by the arbitral tribunal. Senior counsel pointed out that the arbitral tribunal had dismissed the objections raised by HMDA under Section 34 of the Arbitration and Conciliation Act, 1996.

He argued that the contractor could not be deprived of the benefits of the award while the appeal was pending, suggesting that the court could impose reasonable conditions.After considering the arguments, the bench directed the HMDA to deposit 50% of the amount due under the award within six weeks and said that the recovery of the balance amount would remain stayed during the pendency of the appeal.

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