In a relief to Chennai Metro Rail Limited (CMRL), the Madras High Court on Tuesday allowed it to proceed with fresh tenders for the underground tunnelling work for the Saidapet-Government Estate project.
Chennai Metro Rail sources say they are likely to finalise another contractor for >completion of the rest of underground tunnelling and station work on Anna Salai in two months.
This work was earlier carried out by Gammon India in a joint venture with Russian firm Mosmetrostroy; but the latter abandoned the project midway and the former’s contract was terminated sometime back.
Dismissing pleas by > Gammon India to stay the termination of its 2011 contract, after its Russian partner left, Justice K. Ravichandrabaabu said, “As this court has not stayed the termination, it is open to the CMRL to go ahead with the project and complete the same by employing a new contractor.”
However, he allowed the pleas of Gammon India, which sought for an interim injunction > restraining CMRL from invoking the bank guarantees issued over the project. Gammon India was directed to keep the bank guarantees alive, till the disposal of the arbitral proceedings with CMRL.
Gammon had several bank guarantees to the tune of Rs. 166.16 crore with the ICICI Bank, besides a guarantee of Rs. nine crore with the Bank of Baroda.
If the bank guarantees were not extended before they expired, the CMRL was at liberty to invoke them without notice to the company, the judge said and further directed the parties to take steps to initiate arbitral proceedings within four weeks.
“Since the project is an important project which cannot brook the delay any more, this court cannot prevent the respondent from going ahead with the project and complete the same with the third party,” he said.
As for the Gammon’s contention that a sum of Rs. 100 crore was to be paid for the work done, which was challenged by the CMRL, the judge said, “Needless to say that this claim by the applicant and denial by the respondent is a matter to be gone into by the Arbitral Tribunal.” The court also held that whether the termination was valid was to be decided by the arbitral tribunal.
