M/S Innovision Limited vs National Highways Authority Of India

$~70
* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
% Date of Decision: October 29 , 2026
# CNR No. DLHC010443422026
+ W.P.(C) 13681/2026 & CM APPL. 74638/2026
M/S INNOVISION LIMITED .....Petitioner
Through: Ms. Shagun Shahi Chugh,
Mr. Varun Chugh & Ms.
Ayushi Bansal, Advs.
versus
NATIONAL HIGHWAYS AUTHORITY
OF INDIA .....Respondent
Through: Mr. Santosh Kumar, Sr. Adv.
with Mr. Manav Gill, Mr.
Prashant, Mr. Avesh Harshan,
Ms. Sesa Gill & Mr. Akash
Kishore, Advs.
CORAM:
HON'BLE MR. JUSTICE AMIT MAHAJAN
AMIT MAHAJAN, J. (Oral)
1. With the consent of the learned counsel for the parties, the
matter is taken up for final hearing today.
2. By way of the present petition, the petitioner seeks the
following reliefs: -
“a. issue an appropriate writ, order or direction, more
particularly a Writ of Certiorari, quashing and setting
aside the impugned letter dated 10.09.2026 issued by the
Respondent, insofar as it approves and/or directs the
forfeiture of the Petitioner's Performance Security of Rs.
1,60,00,000/- (Ruj5ees One Crore Sixty Lakh only) under
Clause-18(a) of the Contract Agreement dated
10.06.2022;
Signature Not Verified
Signed By:SHIKHA
SEHGAL
Signing Date:30.10.2026
20:19:12

b. issue an appropriate writ, order or direction quashing
paragraph 13 of the impugned order dated 10.09.2026,
insofar as it purports to reserve .of confer upon the
Respondents a right to recover, adjust, appropriate or
otherwise realise the said sum of Rs. 1,60,00,000/- from
any other ongoing contract of the Petitioner and/or from
the Common Bank Guarantee available with the
Respondent;
c. declare that the condition precedent stipulated in
Clause 18(a) of the . Contract Agreement, namely, that the
forfeiture of the Performance Security of Rs. 1,60,00,000/-
can arise only "after three such incidents of levy of penalty
for exeess charging", has not been satisfied in the facts of
the present case, there.being no finding or identification
in" the impugned order of three separate incidents of levy
of penalty under Clause 18(a);
d. issue an appropriate writ, order or direction declaring
that the Respondents could not have invoked the forfeiture
contemplated under Clause 18(a) without first establishing
the contractual condition precedent for such forfeiture,
and consequently restrain the Respondents from giving
effect to or acting upon the purported " forfeiture of Rs.
1,60,00,000/-;
e. issue an appropriate-writ, order, or direction
restraining the Respondents, their officers, agents and/or
authorities from inyoking, encashing, appropriating or
adjusting any Performance Security, Bank Guarantee,
Common Bank Guarantee, receivable or other amount
furnished or payable-in relation to any contract other than
the Contract Agreement dated 10.06.2022, towards the
purported forfeiture of Rs. 1,60,00,000/- arising from the
impugned order dated 10.09.2026.”
3. The case set up by the Petitioner is that it had entered into a
Contract Agreement dated 10.06.2022 with the Respondent for
collection of user fee at Diengpasoh Fee Plaza, Meghalaya, for a
period of one year, commencing from 11.06.2022 and ending on
11.06.2023 against an annual remittance of Rs. 19,19,89,635/- and
Performance Security of Rs. 1,60,00,000/-.
4. It is stated that, pursuant to a forensic audit undertaken by the
Signature Not Verified
Signed By:SHIKHA
SEHGAL
Signing Date:30.10.2026
20:19:12

Respondent, certain aggregate excess Fee collection was flagged and
consequently, the Respondent, vide letter dated 14.07.2026, imposed a
penalty of ₹1,00,000/- in relation to alleged under-reporting of cash
transactions under Clause 18(a) of the Contract Agreement. The said
amount was allegedly paid by the Petitioner on 20.05.2025.
Thereafter, the Respondent issued a show-cause notice dated
24.08.2026, proposing forfeiture of a sum of ₹1,60,00,000/- from the
Performance Security furnished by the Petitioner, purportedly in
exercise of the powers conferred under Clause 18(a) of the Contract
Agreement. The Petitioner submitted its response dated 31.08.2026.
However, the Respondent, vide the impugned letter dated 10.09.2026,
approved the forfeiture of the aforesaid amount.
5. The principal contention of the Petitioner is that the action of
the Respondent is contrary to the terms of Clause 18(a) of the Contract
Agreement. The Petitioner further disputes the allegation of excess
collection and asserts that the alleged discrepancies arose in the course
of technical and operational issues and questions the Respondent’s
decision to forfeit a sum of ₹1,60,00,000/-. The Petitioner has also
assailed the Respondent’s asserted entitlement to recover the amount
in question from securities furnished in respect of other contracts.
6. Per contra, the Respondent has raised a preliminary objection to
the entertainment of the present petition, contending that the
controversy arises entirely out of the contractual relationship between
the parties and involves disputed questions of fact as well as
interpretation of the contractual stipulations.
Signature Not Verified
Signed By:SHIKHA
SEHGAL
Signing Date:30.10.2026
20:19:12

7. In support of its action, the Respondent has placed reliance
upon the forensic audit conducted by M/s Deloitte Touche Tohmatsu
India LLP, the final report whereof is stated to have been submitted on
14.02.2025. As per the Respondent, the audit identified several
discrepancies at the Diengpasoh Fee Plaza, including instances of
alleged under-reporting of cash transactions, excess collection of user
fee, deficiencies in the functioning of the AVCC system and incorrect
or missing vehicle numbers in cash and exempt transactions. Insofar
as the allegation of excess collection is concerned, the Respondent
asserts that the audit identified distinct instances of excess collection
of user fee. The Respondent also disputes the Petitioner’s assertion
that the excess amounts had been refunded to the concerned users.
8. According to the Respondent, the threshold contemplated under
Clause 18(a) stood satisfied. The Respondent maintains that the
forfeiture of ₹1,60,00,000/- was consequently in accordance with the
contractual stipulations.
9. At the outset, it is necessary to observe that it is well-settled
merely because a dispute arises out of a contractual relationship, the
jurisdiction of this Court under Article 226 of the Constitution of India
is not excluded. However, the existence of such jurisdiction does not
imply that every dispute arising out of a contractual relationship must
necessarily be adjudicated in writ proceedings.
10. The nature of the dispute and the availability of an alternate
remedy are also parameters which have to be considered by this Court.
11. Evidently, the rival submissions disclose a substantial contest
Signature Not Verified
Signed By:SHIKHA
SEHGAL
Signing Date:30.10.2026
20:19:12

not only with regard to the interpretation of Clause 18(a) of the
Contract Agreement, but also with regard to the factual foundation
upon which the Respondent has proceeded to invoke the forfeiture
mechanism.
12. The determination of this contractual dispute would necessarily
require an examination of the underlying transactional records, the
findings and methodology of the forensic audit, the individual
transactions and the circumstances in which the alleged excess
collections took place. It would also require consideration of the
material relied upon by the parties in relation to the alleged refunds.
13. The Court is, therefore, of the view that the controversy is not
confined to a straightforward interpretation of a contractual provision.
It involves mixed questions of fact and contractual interpretation, the
determination of which would require a detailed examination of the
relevant records and appreciation of evidence.
14. This Court cannot undertake a detailed fact-finding exercise in
order to determine the correctness of these rival positions in the
exercise of its extraordinary writ jurisdiction, particularly when the
controversy is capable of being examined in appropriate proceedings.
15. In view of the nature of the controversy and the disputed
questions requiring examination, the petition is dismissed, with liberty
to the Petitioner to avail of appropriate remedies in accordance with
law.
16. Needless to state that this Court has not opined upon the merits
of the case and all the issues are left open for consideration by the
Signature Not Verified
Signed By:SHIKHA
SEHGAL
Signing Date:30.10.2026
20:19:12

appropriate forum.
17. The date already fixed, that is, 02.12.2026 stands cancelled.
AMIT MAHAJAN, J
OCTOBER 29, 2026
“SS”
Signature Not Verified
Signed By:SHIKHA
SEHGAL
Signing Date:30.10.2026
20:19:12