Insolvency appellate tribunal NCLAT has extended the implementation date of a contract termination letter issued by NHAI to IL&FS group company West Gujarat Expressway Ltd for a project to April 1, 2022.

A two-member bench observed that the resolution of West Gujarat Expressway is at a “critical stage” and expected to be completed by March 31, 2022.

West Gujarat Expressway Ltd had pleaded for quashing of the termination notice issued by National Highways Authority of India (NHAI) on December 21, 2021, for a highway project. NHAI issued the termination notice after observing that the concessionaire has committed default in terms of the Concession Agreement and took possession and control of the project.

The National Company Law Appellate Tribunal (NCLAT) said: “We are not required to adjudicate the factual dispute between the parties or return any finding as to whether Termination Notice was issued on sufficient ground or not.” However, it said as per the affidavit filed on behalf of Center, it is clear that the Resolution Process of IL&FS Group Company is at the final stage and is likely to be completed before March 31, 2022.

“… looking to the fact that the Resolution of IL&FS Group Companies including the Applicant is in a critical stage and may be completed by March 31, 2021, we further direct that Termination Notice dated December 21, 2021, issued by NHAI be implemented with effect from April 1, 2022,” said NCLAT bench headed by Chairperson Justice Ashok Bhushan.

NCLAT direction came over a plea filed by the West Gujarat Expressway praying for quashing the Termination Notice issued by the National Highways Authority of India (NHAI) on December 21, 2021.

It had entered into a concession agreement on March 22, 2005, with the NHAI for conversion of Jetpur-Gondal-Rajkot bypass section of NH-8B into an access controlled four-lane highway with service lanes along certain sections and strengthening of the existing lanes in Gujarat, on build-operate-transfer (BOT) Basis, having a concession period of 20 years.

West Gujarat Expressway completed the construction work in the year 2008 for which completion certificate was issued on August 14, 2008.

The NHAI issued various notices to the company regarding the compliance of safety provisions envisaged in the Agreement and to rectify the default observed from time to time.