NHAI Pursues Conciliation in Financial Dispute with Jaiprakash Associates Over ₹ 1,461.6 Crore Claims

The National Highways Authority of India (NHAI) has opted for a conciliation process to resolve a financial dispute with Jaiprakash Associates Ltd, which is currently bankrupt. This dispute involves the Varanasi-Gorakhpur road projects. Jaiprakash Associates is seeking Rs 1,461.63 crore as compensation for the four-laning of the Varanasi-Gorakhpur Section of NH-29 in Uttar Pradesh under NHDP Phase-IV on EPC Mode.

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Jaiprakash Associates Ltd has claimed Rs 1,461.63 crore due to various reasons. These include resource deployment for removing encroachments within the right of way, damages from delays in land provision, revised minimum wage payments, and additional costs from project extensions. The company detailed these claims in a regulatory filing.

Conciliation Process Initiated by NHAI

NHAI has countered with claims amounting to Rs 892.24 crore. These counterclaims are based on alleged delays in project completion, supervision consultancy services, direct revenue loss from toll collection, and liquidated damages. NHAI has referred this dispute for conciliation to its Conciliation & Settlement Committee of Independent Experts.

ICICI Bank Ltd filed a petition on September 7, 2018, with the National Company Law Tribunal's Allahabad Bench. This petition was under Section 7 of the Insolvency and Bankruptcy Code, 2016. It sought the initiation of the Corporate Insolvency Resolution Process against Jaiprakash Associates Ltd, citing a financial debt of Rs 1,269.10 crore related to various loans.

Impact on Jaiprakash Associates Ltd

Due to the ongoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016, Jaiprakash Associates Ltd's management is suspended. Consequently, only the Resolution Professional can represent the company in legal matters.

The decision to pursue conciliation reflects NHAI's approach to resolving disputes amicably. By involving independent experts, NHAI aims to find a fair settlement that addresses both parties' concerns without prolonged litigation.

With inputs from PTI