Delhi High Court Stays NHAI Debarment and MoRTH 'Catastrophic Event' Order Against Highway Contractor
The Delhi High Court has granted interim relief to Oriental Structural Engineers Private Limited and Poondiankuppam Sattanathapuram Section Private Limited, staying two separate coercive actions taken by the National Highways Authority of India (NHAI) and the Ministry of Road Transport and Highways (MoRTH). The orders came in two writ petitions filed by the companies.
The dispute arises from an alleged incident on the Poondiankuppam–Sattanathapuram section of NH-45A in Tamil Nadu. On 30 September 2026, NHAI declared the bidder and the concessionaire as "Non-Performers" and debarred them from participating in tenders floated by MoRTH, NHAI and other executing agencies for one year, or until completion of prescribed rectification works, whichever was later. NHAI also imposed a monetary penalty on the concessionaire.
The companies challenged the debarment before the Delhi High Court in W.P.(C) 15213/2026. On 13 October 2026, the court issued notice in the petition and stayed the debarment order as an interim measure. The court prima facie observed that once a completion certificate had been issued almost two years earlier, a debarment order could not have been passed for subsequently discovered defects without adjudication by the contractual dispute resolution mechanism, which the concessionaire had already invoked. The court also directed NHAI to publish information about the stay order on its website.
While that challenge was pending, MoRTH passed a separate order dated 12 October 2026, notifying the same incident as a "Catastrophic Event" under its applicable policy circulars. The consequence was a two-year debarment of the concessionaire and bidder from participating in tenders of MoRTH's executing agencies. The companies challenged this order in W.P.(C) 15494/2026. On 16 October 2026, the court issued notice and stayed the effect of MoRTH's order as an interim measure.
During the hearing, it was demonstrated that both actions arose from the identical alleged incident, and that allowing MoRTH's subsequent order to operate would effectively nullify the interim protection already granted against NHAI's debarment order. The challenges were filed and listed in quick succession given the sequence of the two orders, and the interim relief was critical for the companies because the restrictions on participating in future highway infrastructure projects were particularly harsh for their business.
The bidder and concessionaire were represented by Mr. Sandeep Sethi, Senior Advocate, briefed by a team led by Partners Ajit Warrier and Angad Kochhar, along with Himanshu Setia (Senior Associate) and Tanvi Chhabra (Associate).
Source: SCC Times