Quick Summary: The Bombay High Court looked at a case between the State of Maharashtra and Kalyan Sangam Infratech Ltd. about a bridge project. The court supported a decision that favored Kalyan Sangam, who said they lost money because of changes made by the government.
Back in 2009, Kalyan Sangam Infratech Ltd. was given the job to build and manage two bridges in Thane. They were allowed to collect tolls as payment. Problems started when toll collections dropped, and Kalyan Sangam blamed the government for this.
Kalyan Sangam started collecting tolls in November 2011 but soon faced problems: - Entry Ban: A traffic ban was put in place for flyover construction, reducing toll traffic. - Discounts: Local vehicles got big toll discounts, which hurt revenue. - Bus Bypass: Buses from the Thane Municipal Corporation (TMC) refused to pay tolls.
Kalyan Sangam said these actions by the government broke their agreement in a major way.
The argument went to arbitration, and in 2017, the arbitrators decided in favor of Kalyan Sangam. They found the government had broken the agreement by not dealing with these issues, which greatly hurt toll collections.
"The arbitrators found a 57% loss in toll revenue due to government actions," noted the decision.
Justice Somasekhar Sundaresan looked at the case and supported the arbitration decision: - Major Breach: The court agreed that the government's actions had a big negative impact on Kalyan Sangam's ability to collect tolls. - Compensation: The decision to award final payments based on the project's debt and equity was supported. - Interest Rate: The interest applied was in line with the contract terms.
The court dismissed the State of Maharashtra's request and ordered them to pay costs to Kalyan Sangam. The decision highlighted the importance of sticking to agreements and the impact of government policies on private projects.
