Judicial interference in foreign-funded mega projects not in nation's interest, SC says

SC sets aside Delhi HC order on high speed bullet train project
Last Updated 31 January 2022, 17:59 IST

The Supreme Court on Monday said delay in mega projects funded by foreign countries on bilateral agreement due to judicial interference may not be in the larger public interest and also not in the nation's interest.

The top court set aside Delhi High Court judgment, directing National High Speed Rail Corporation Limited (NHSRCL) to consider the bid of Montecarlo Limited, for construction and development of a depot in connection with the Mumbai-Ahmedabad bullet train project.

“Such interference by the courts midway and delay in the projects like these which are funded by the foreign countries on bilateral mutual understanding/agreement by the developed country to a developing country may affect the future investments/funding,” a bench comprising Justices M R Shah and A S Bopanna said said.

The court said any delay in execution of such a Mega project, which is a very important for the developing country like India may not be in the larger public interest and in the nation’s interest.

It pointed out that the High Court ought to have appreciated that it is always advisable that in such a foreign funded mega project, delay may have a cascading effect and many a times lead to financial burden due to delay in projects.

“Therefore, there shall be minimal interference and/or no interference till the entire tender process or till the award of contract is completed," Justice Shah, who authored the 82-page judgment on behalf of the bench, said.

The bench emphasized there shall be different considerations so far as the judicial interference is concerned between the foreign funded contracts and the ordinary public works contracts funded from public exchequer.

The bench noted that it is difficult for a developing country to go ahead with such a high cost project unless the developed country is ready to fund, more particularly, when the developed country is ready to fund a huge amount at a minimal concessional rate of interest and on suitable terms and conditions of repayment.

“Before entertaining the writ petition with respect to such mega projects funded by the foreign countries, one has to appreciate that funds of such projects by the foreign country is followed by a detailed discussion between the Prime Ministers of both the countries and to strengthen bilateral cooperation in the rail sector,” it said.

The NHSRCL had rejected Montecarlo's bid and awarded the contract to another firm. Montecarlo moved the high court claiming that no reasons were assigned while rejecting its bid.

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(Published 31 January 2022, 17:59 IST)

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