M/S Edapally To Kodungallur Highway Private Limited & Anr. vs National Highway Authority Of India

$~23
* IN THE HIGH COURT OF DELHI AT NEW DELHI

Date of Decision: 25.02.2026

+ O.M.P.(I) (COMM.) 379/2025, I.A. 26430/2025 (Delay of 11
days in filing the reply to the petition) & I.A. 5279/2026 (For
filing of Addl. Documents)

M/S EDAPALLY TO KODUNGALLUR HIGHWAY
PRIVATE LIMITED & ANR. .....Petitioners
Through: Mr. Anil K. Airi, Senior
Advocate along with Mr. Ravi
Krishan Chandna and Mr.
Harsh Gautam, Advocates
along with Mr. Biswarup
Chanda, AR.
versus

NATIONAL HIGHWAY AUTHORITY OF INDIA
.....Respondent
Through: Mr. Santosh Kumar, Standing
Counsel and Mr. Adithya
Ramani, Advocate for
Respondent No. 1.
CORAM:
HON'BLE MR. JUSTICE HARISH VAIDYANATHAN
SHANKAR


% JUDGEMENT (ORAL)
HARISH VAIDYANATHAN SHANKAR, J.

1. The present Petition has been filed under Section 9 of the
1
Arbitration and Conciliation Act, 1996 , seeking, inter alia, the
following reliefs:-
“a. Pass an order staying/quashing/setting aside the impugned
letter dated 25.08.2025 issued by the Respondent debarring the

1
Act
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:28.02.2026
13:47:19
O.M.P.(I) (COMM.) 379/2025 Page 1 of 7

Petitioner no. 1 and 2 and from acting in any manner on the
said letter.
b. Pass an order restraining the Respondent from in any manner
treating the Petitioner No.1 and 2 as debarred entity and from
posting any such declaration on the website of the Respondent.
c. Pass any other order or orders that this Hon'ble Court may
deem fit and appropriate in the given facts and circumstances
of the case and in the interest of justice, may also kindly be
granted.”

2. Learned counsel for the Respondent has taken a preliminary
objection that the present Petition is not maintainable since the aspect
2
of debarment qua the Debarment Letter dated 25.08.2025 , in
respect of which reliefs have been sought, is not an arbitrable dispute.
He would submit that keeping in view the judgment of the Hon’ble
3
Supreme Court in Patel Engg. Ltd. v. Union of India , the power to
debar is an inherent power which was in an authority and therefore the
same need not necessarily be provided for in the Concession
4
Agreement dated 12.03.2022 itself.
3. He would further submit that the appropriate course of action
for canvassing the present reliefs would be to prefer a writ petition. He
would further contend that the Petition in the present form is not
maintainable since the Respondent has privity of contract only with
Petitioner No. 1, and not with Petitioner No. 2. He would submit that
reliefs, if any, that could be sought can therefore only be with respect
to Petitioner No. 1.
4. Per contra , learned counsel for the Petitioners would submit
5
that a perusal of the Show Cause Notice dated 25.06.2025 and the

2
Debarment letter
3
(2012) 11 SCC 257
4
Agreement
5
SCN
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:28.02.2026
13:47:19
O.M.P.(I) (COMM.) 379/2025 Page 2 of 7

Debarment letter would make it apparent that the harsh step of
debarment is stated to be a consequence of the alleged non-
performance or faulty performance done by the Petitioners herein and
therefore in terms of the Arbitration Clause being Clause 38.1 of the
Agreement, the question of debarment would necessarily fall within
the confines of an arbitration proceedings.
5. He would further contend that the question of the issue of
debarment being non-arbitrable has been raised for the first time only
6
after the learned Dispute Resolution Board has rendered its position
and recommendation. He would submit that the learned DRB, in fact,
has given its recommendation in favour of the Petitioners and has
disapproved the debarment. He would further submit that the same is
evident from a perusal of the Reply as preferred by the Respondent
before the Engineer as well as before the DRB, the said replies are
completely silent as to this aspect. He would thus reiterate that since
the debarment is stated to be a direct consequence of the manner in
which contract was performed, the arbitration clause would squarely
apply to any disputes or issues with respect to the performance of the
contract and therefore the present petition is clearly maintainable.
6. In rejoinder , learned counsel for the Respondent would submit
that in terms of Clause 41.1.2 of the Concession Agreement, the
contract is limited only to the parties to the Agreement and therefore,
it is incorrect to contend that Petitioner No. 2 is a proper party to the
present proceedings. He would once again reiterate the principles as
set out in Patel Engg. Ltd ( supra) and in particular Paras 22 to 24
thereof to contend that debarring is a possible consequence of and

6
DRB
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:28.02.2026
13:47:19
O.M.P.(I) (COMM.) 379/2025 Page 3 of 7

which has been held as such in the said judgment. He would further
contend that the pleadings before the DRB were filed by the officer
who does not have knowledge of law and therefore the same cannot
act as estoppel.
7. The relevant dispute resolution clauses are set out as follows:-
“38.1 Dispute Resolution
38.1.1. In the event of any dispute, difference or controversy of
whatever nature howsoever arising under or out of or in relation to
this Agreement (including its interpretation) between the Parties,
and so notified in writing by either Party to the other Party (the
"Dispute") either Party may call upon the Independent Engineer, to
mediate and assist the Parties in arriving at an amicable settlement
thereof.
38.1.2. The Parties agree to use their best efforts for resolving all
Disputes arising under or in respect of this Agreement promptly,
equitably and in good faith, and further agree to provide each other
with reasonable access during normal business hours to all
nonprivileged records, information and data pertaining to any
Dispute.
38.1.3. Dispute Resolution Board (DRB):
Failing mediation by the Independent Engineer or without the
intervention of the Independent Engineer, either Party may require
such Dispute to be referred to the Dispute Resolution Board
("DRB") in accordance with the procedure setforth in Schedule-S
to the Concession Agreement. The decision(s) of the Dispute
Resolution Board shall be binding on both parties who shall
promptly give effect to unless and until the same is
revised/modified, as hereinafter provided, in a Conciliation/
Arbitral Tribunal.”

8. We have heard learned counsel for the parties and have also
perused the record with their able assistance. We are of the considered
view that the present petition, as filed, is clearly maintainable. The
reliefs as sought are in respect of what the Respondent itself has
termed as a direct consequence of the performance of the contract.
9. It is also the understanding of the parties that the issue with
respect to debarment is one which is subject to the dispute resolution
clause and the same is apparent from the fact that during the
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:28.02.2026
13:47:19
O.M.P.(I) (COMM.) 379/2025 Page 4 of 7

proceedings before the Independent Engineer as well as before the
learned DRB, no such issue was raised and it is probably the ingenuity
of the counsel appearing for the Respondent which has led to this
objection being raised. As is apparent, what is relevant is the
understanding of the parties, and if, in the understanding of the parties,
the issue of debarment was an issue which would form the subject
matter of the arbitration, then the objection raised today, for the first
time and without having been urged earlier, cannot now be permitted
to defeat the arbitral process.
10. This Court is also of the view that the petition is maintainable
by Petitioner No. 2 as well.
11. It is also of import to take note of the fact that by virtue of
various clauses as set out in the Agreement as between the parties and,
in particular, the representations and warranties which are enshrined in
Clause 7.1 of the Agreement, Petitioner No. 2 was also required to
make numerous representations and warranties.
12. This Court also take conscious note of both the SCN as well as
the Debarment Notice and by which both Petitioners are sought to be
put to notice and debarred. It is obvious that the Respondent has
treated both the Petitioners herein to be intrinsically interconnected
and thereby passed an order for debarment naming both the parties
therein.
13. Further, it is also noted that the recitals in the Agreement and in
particular recitals D, E and F, which clearly set out the role of the
bidder. The said recitals also set out that the bidder, though it succeeds
in being awarded the contract, the contract itself is to be signed by the
Concessionaire, which came to be incorporated by the bidder.
14. This Court also takes note of the fact that Petitioner No. 2,
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:28.02.2026
13:47:19
O.M.P.(I) (COMM.) 379/2025 Page 5 of 7

which is the bidder, is also a shareholder in the concession. Thus, this
Court is of the view that in view of the aforementioned, there is no
impediment in entertaining the present matter.
15. On merits, learned counsel for the Respondent would seek to
rely upon the various documents filed in support of the Reply. These
include certain pictures and letters issued by the Respondent
Authority. Learned counsel for the Respondent would submit that
these clearly evidence the unsafe manner in which the construction is
being carried out and how the same constitutes public safety issues
and is therefore deserving of the decision taken for debarment. He
would therefore submit that the Debarment letter itself is well
substantiated and there is absolutely no requirement for this Court to
interdict the same or to stay the effect of it.
16. This Court is of the opinion that while deciding a Petition under
Section 9 of the Act, there arises no occasion to conduct a mini trial
and to examine each and every contention raised in support of any
directions that are passed.
17. This Court further believes that these are aspects which would
necessarily and properly have to be examined by the learned arbitral
tribunal which may come to be constituted.
18. Learned counsel for the Respondent would also submit that
though there are numerous steps that can be taken as under the
agreement, however, he would once again reiterate Patel Engg. Ltd
( supra) to state that debarment is an option which is always open.
19. In view thereof, this Court is of the view that the prayers as
sought would need to be granted and in consequence thereof, the
operation of the impugned letter dated 25.08.2025 is hereby stayed
and, consequentially, neither of the Petitioners would be treated as a
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:28.02.2026
13:47:19
O.M.P.(I) (COMM.) 379/2025 Page 6 of 7

debarred entity by the Respondent Authority .
20. It is also directed that Respondents shall not post any
declaration on its website to the effect that the Petitioners stands
debarred.
21. The present Petition, along with pending application(s), if any,
is disposed of in the aforesaid terms.


HARISH VAIDYANATHAN SHANKAR, J.
FEBRUARY 25, 2026/nd/va

Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:28.02.2026
13:47:19
O.M.P.(I) (COMM.) 379/2025 Page 7 of 7