In a recent court battle, Kalyan Sangam Infratech Ltd. took on the State of Maharashtra over a toll collection disagreement. Here's a breakdown of what happened and how the court decided.
Back in 2009, Kalyan Sangam was given a project to build and maintain bridges in Thane, with the promise of collecting tolls for over 23 years. But things didn’t go as planned. By 2011, Kalyan Sangam faced issues with toll collections, blaming a ban on vehicle entry and lower toll rates for local residents. They claimed these changes led to a big drop in money made from tolls.
"Serious mistake by the Government of Maharashtra," Kalyan Sangam argued, pointing fingers at the government.
The disagreement went to arbitration, focusing on whether Kalyan Sangam was right to end the agreement because of these issues. The group in charge of the arbitration found that the State of Maharashtra did indeed break the contract, affecting Kalyan Sangam's ability to collect tolls as originally agreed.
Judge Somasekhar Sundaresan reviewed the arbitration decision. The court agreed with the arbitration group's decision, emphasizing that the State's actions significantly impacted toll collections. The judge noted that the traffic ban and toll concessions were not part of the original deal and had a "serious negative effect."
The court agreed with the arbitration group's decision on the final payments Kalyan Sangam was entitled to. These payments were based on the project cost and a debt-equity ratio, which the court found to be fair. The interest rate applied was also upheld, matching the contract terms.
The court dismissed the State's challenge against the arbitration decision, ruling in favor of Kalyan Sangam. The State was ordered to pay costs and release any deposited amounts within a specific timeframe.
"No fault can be found with the arbitration group's conclusions," the judge declared, closing the case in favor of Kalyan Sangam.
This case highlights the complexities of infrastructure agreements and the importance of sticking to original terms. Kalyan Sangam's win is a reminder of how crucial it is for both parties to adhere to their commitments.
