Delhi High Court Lifts Injunction on NHAI’s Termination of Expressway Contract

The Hon’ble High Court of Delhi in the case of National Highways Authority of India v. Roadway Solutions India Infra Limited (2026:DHC:320-DB), dated January 13, 2025, has set aside an interim injunction restraining the National Highways Authority of India (NHAI) from terminating a construction contract forming part of the Delhi–Mumbai Expressway, holding that courts must exercise restraint in granting interim reliefs that impede large public infrastructure projects.

The dispute concerned a contract awarded by NHAI for construction of a stretch of the Delhi–Mumbai Expressway. Owing to delays, the parties entered into multiple settlement agreements revising timelines and milestones, the latest being the third settlement agreement executed in August 2025. Despite these extensions, NHAI issued a notice of intention to terminate the contract on the ground that the contractor had failed to achieve meaningful physical progress. The contractor approached the Delhi High Court under Section 9 of the Arbitration and Conciliation Act, 1996, contending that delays were attributable to incomplete land handover, that progress had been achieved on an expenditure basis, and that termination would result in irreparable harm, including blacklisting. Accepting these submissions, a single judge restrained NHAI from acting on the termination notice.

Allowing NHAI’s appeal, the Division Bench undertook a detailed examination of the material on record. It found that land acquisition was substantially complete and that the contract had already been extended multiple times, demonstrating considerable indulgence on NHAI’s part. The court placed reliance on inspection reports, which showed that even after the revised timelines under the third settlement agreement, the contractor had not achieved commensurate physical progress on site.

The court rejected the argument that expenditure-based progress could substitute for physical execution, observing that infrastructure contracts are evaluated on actual on-ground performance. It also rejected the contention that the termination notice was premature or a counterblast, noting that the record disclosed sufficient cause for the issuance of the notice. Importantly, the Court held that at the interim stage, it was impermissible for a Section 9 court to conduct a mini-trial on whether termination was justified. Placing emphasis on Sections 20A and 41(ha) of the Specific Relief Act, 1963, the Court held that injunctions that delay or obstruct infrastructure projects are statutorily discouraged. It observed that continuing a non-performing contract through interim orders would run contrary to public interest and the objective of timely completion of nationally significant infrastructure projects.

While vacating the injunction against termination, the court balanced equities by restraining encashment of bank guarantees and surety bonds pending final adjudication of the Section 9 petition. NHAI was permitted to proceed with termination and issue a fresh tender for completion of the project.