Delhi-Mumbai Expressway: NHAI Can Move to End Expressway Contract After Delhi High Court Lifts Restraining Order
Mohd Talha Hasan
16 Jan 2026 11:38 AM IST
The Delhi High Court, while hearing an appeal under Section 37(1)(b), has observed that an injunction granted by the Section 9 (power to grant interim measures) court ought not to have been granted. This injunction had restrained the National Highway Authorities of India (NHAI) from proceeding in furtherance of its notice of intention to terminate, dated 23.12.2025.
Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 (the Act), provides a right to appeal to the competent court against a court order that either grants or refuses to grant interim measures under Section 9 of the Act, which deals with interim relief during arbitration proceedings
The Court emphasised that such an injunction would result in a significant delay to the Delhi-Mumbai National Expressway Project, which would constitute a "national loss." This impact is specifically felt by citizens who are currently required to take a detour for a stretch of 87 km of road. The Court noted that this particular stretch is either incomplete or moving forward at a very slow pace, making the continued restraint on the project unsustainable.
The Division Bench of Justice Dinesh Mehta and Justice Vinod Kumar observed that the contract cannot be kept alive for the purposes mentioned in Section 9(1)(ii)(c). Even if the contract is terminated, the rights of the parties will not be adversely affected, as the Contractor can approach the arbitral tribunal and claim damages or the cost of construction. etc.
It was the case of the Appellant that the impugned injunction granted vide order dated 02.01.2026, restrains NHAI from terminating the contract concerning package No. VIII, a part of the Delhi-Mumbai National Expressway Project. It was pointed out that the Respondent itself had issued a notice of intention to terminate, dated 18.12.2025, citing NHAI's failure to make land available for construction.
Since the Respondent itself wanted the contract to be terminated, the Section 9 Court ought not to have granted the impugned injunction. Furthermore, if NHAI is restrained from terminating the contract, it would be deprived of engaging some other contractor to complete the work.
It was the case of the Respondent that the subject notice dated 23.12.2025 is a counterblast to the Respondent's notice dated 18.12.2025. In the subject notice, NHAI has stated that the Respondent failed to discharge the obligations under the contract while ignoring the third settlement agreement (SA-3) executed between the parties on 12.08.2025, whereby the project milestones were revised.
Furthermore, NHAI was required to hand over the possession of the entire land of package No. VIII. Due to NHAI's fault, the project could not witness the desired progress. Lastly, the balance of convenience lies in favour of the Respondent, as such termination would entail automatic blacklisting from future NHAI's Notice Inviting Tenders.
The bench observed that NHAI vide letters dated 23.08.2025 and 14.10.2025 intimidated the Contractor to mobilise their labour and machinery on or near the spot, such that the possession can be taken. Therefore, the argument that land not being handed over cannot be accepted. Furthermore, there is material on record to establish that NHAI had valid reasons to issue the subject notice, and the said notice was not without authority.
The bench further observed that Section 41 of the Specific Relief Act, 1963, fetters the Court's power to grant an injunction, and Section 20A of the Act mandates that an injunction cannot be granted if it would delay the progress of an infrastructural development.
The argument that it will be in the project's best interest for the Respondent to be allowed to complete the work is contrary to principles governing the sphere of commercial contracts, where the terms are to be strictly adhered to. It is within the domain and discretion of the contract's awarder to either continue with the contract or terminate it. If the termination is unlawful, the remedy lies in seeking compensation before the appropriate forum. A Section 9 court, by an interim order, should not stay the termination of the contract.
Lastly, the bench observed that the balance of convenience lies in favour of the nation and its citizen and therefore in NHAI, because the citizens cannot be deprived of a well-constructed highway to ensure smooth and free movement.
The Appellate Court also directed NHAI not to encash the Surety Bond(s) and Bank Guarantee(s) furnished by the Respondent till the Section 9 application is pending. In the above terms, the Appellate Court vacated the injunction granted by the Section 9 court.
Case Name: National Highways Authority of India v. Roadway Solutions India Infra Limited
Case Number: FAO(OS) (COMM) 4/2026
Citation: 2026 LLBiz HC (DEL) 44
Counsel for the Appellant: Tushar Mehta, SG, Ankur Mittal, Abhay Gupta and Sucharu Garg, Advs.
Counsel for the Respondent: Rajiv Nayyar and Gopal Jain, Sr. Advs. with Samir Mahk, Varun Kalra and Krishan Kumar, Advs.