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2017 DIGILAW 1840 (JHR)

Court on its Own Motion v. Union of India

2017-11-01

APARESH KUMAR SINGH, B.B.MANGALMURTI

body2017
ORDER : 1. Mr. Vijay Srivastava, Regional Officer, NHAI, Ranchi and Mr. Devendra Kumar Gupta, Project Director, NHAI, Ranchi are present on behalf of the respondent NHAI. Mr. Rash Bihari Singh, Engineer-in-Chief, Road Construction Department, Ranchi and Mr. Lalu Oraon, Executive Engineer, Road Construction Department, Ranchi (Gramin) are present on behalf of the respondent State. Mr. K. Srinivasa Rao, Managing Director of the respondent No. 6 Agency and Mr. B. Ramachandra, Authorized Signatory-cum-Project Manager, REL are also present on behalf of the respondent No. 6 Agency. Mr. Anand Swarup Sharma, BSE, AARVEE Associates (IE), Ranchi are present on behalf of Independent Engineer. 2. Pursuant to our previous order dated 20.09.2017, Canara Bank, lead Banker, has appeared on service of notice. The respondent Agency has filed one supplementary affidavit pursuant to the last order wherein it states that M/s. Ranchi Expressways Ltd. is a Special Purpose Vehicle (SPV) Company incorporated for the purposes of execution of the work relating to Ranchi-Mahulia Section of NH-33 by the NHAI and work is to be executed out of the own funds and other sources of investment by own accord project is known as Design, Build, Finance, Operate and Transfer (DBFOT) annuity basis under NHDP Phase-III. The SPV does not have assets of its own and it is not required under the law to have its own assets. It further discloses the assets of the Managing Director and two Directors of the Board of Directors of SPV. 3. Today on being specially confronted, learned counsel for the respondent Agency informs that the Principal Holding Company which has set up SPV, is Madhucon Infra Private Limited. However, there is no mention of the Principal Holding Company in its affidavit, though as per the purport of the order, the Agency should have come clean on this aspect. The Agency should have come fair in relation to the entire incorporation of the SPV and the Principal Holding Company behind it. The stand of the Agency in the present affidavit on this count, appears to suppress the important relevant facts from the Court. We once again direct it to disclose the entire assets of the Principal Holding Company and its promoters, Directors, Managing Director, their assets and security that have been created while entering into the agreement with the lender Canara Bank. We once again direct it to disclose the entire assets of the Principal Holding Company and its promoters, Directors, Managing Director, their assets and security that have been created while entering into the agreement with the lender Canara Bank. This affidavit further refers to a chart showing progress of the work up to 28.10.2017 (Annexure-D and E) by the Independent Engineers M/s. AARVEE Associates. The Agency has also raised a point that the performance security bank guarantee for Rs. 73.95 crores with the respondent NHAI, has not been released despite the appointed date i.e. 04.12.2012 having crossed long back. In respect of execution of the work, as per their revised programme, they have infused Rs. 3.42 crores after the order dated 20.09.2017 while the banker provided the loan of Rs. 6.87 crores, totalling 9.87 crores. However, Bank has adjusted the amount of Rs. 8.48 crores against interest during construction, leaving behind only an amount of Rs. 1.39 crores to the project work which has adversely affected the progress of the work. 4. We may observe here that during the deliberation on the previous dates, the Agency had orally apprised the Court through their counsel that it has intent to infuse funds from their sources and other projects being executed by it in different States. 5. In relation to the issue of environmental clearance, it states that the environmental clearance has not been granted in respect of three mines at village Ulatu. The issue relating to extension of mining lease at village Dubla is pending before the Deputy Commissioner District Mining Officer, Ranchi which they are regularly pursuing. Lastly, they have stated that due to intermittent rainfall spread up to Diwali i.e. 21.10.2017, progress of the work has been affected due to this reason also. 6. NHAI on its part, has filed the status report relating to the progress of the work. The chart of financial/physical progress achieved up to 25.10.2017, as reported by the Independent Engineer, is 45.75%. We may point out here that the progress of the work had been up to 44% by July 2017. Chart at para-5 is referred to hereunder:- S. No. Month Target (Rs.) Achievement (Rs.) Shortfall (Rs.) 1. August 2017 7.913 (0.58%) 3.520 (0.26%) 4.393 (0.32%) 2. September 2017 21.936 (1.62%) 3.492 (0.258%) 18.445 (1.36%) 3. We may point out here that the progress of the work had been up to 44% by July 2017. Chart at para-5 is referred to hereunder:- S. No. Month Target (Rs.) Achievement (Rs.) Shortfall (Rs.) 1. August 2017 7.913 (0.58%) 3.520 (0.26%) 4.393 (0.32%) 2. September 2017 21.936 (1.62%) 3.492 (0.258%) 18.445 (1.36%) 3. October 2017 32.485* (2.39%) 2.577 (0.19%) 29.908 (2.21%) It shows the serious shortfall in terms of investment in each of the months August, September and October 2017 and are self speaking. The Physical progress chart is part of Annexure-E series and contains weekly progress report for the month of October 2017. A bare perusal of the chart which contains sub-classification of the entire work in 23 items, depicts abysmal achievement of targets. In fact, in the first week of October 2017 up to 6.10.2017, 0.08% against the target of 1.78% under the sub-item WMM was only achieved. Out of the 23 items, some achievement is shown in respect of 06 sub-items only in the second week which is substantially lower than the targets, similar is the situation in the third week ending on 20.10.2017, progress of the work up to 25.10.2017 in total shows shortfall of around 50-100% under different sub-items, whereas in certain works, there is no achievement at all. Respondent-NHAI has also taken up the repairing and maintenance work through other Agencies at the risk and cost of the Concessionaire and the entire stretch through km 139.000 to km 277.500 has been divided into three sections and work allotment has been issued to three different Agencies. Out of the total maintenance of the existing road required i.e. 58.21 km, maintenance of 5.53 km has been achieved up to 27.10.2017, as reported by the Independent Engineers and the work in the remaining length is in progress. NHAI Headquarters has vide letter dated 24.08.2017, accorded approval for change of Scope Notice to the Concessionaire. Therefore, hindrance reported due to change of scope in the length of 11.78 km in the mainline and 1.1 km under Ranchi Bye-pass is resolved. This picture after the approval of the revised programme and our order dated 22.08.2017, shows virtually no serious progress in the work on the part of the Concessionaire. Therefore, hindrance reported due to change of scope in the length of 11.78 km in the mainline and 1.1 km under Ranchi Bye-pass is resolved. This picture after the approval of the revised programme and our order dated 22.08.2017, shows virtually no serious progress in the work on the part of the Concessionaire. It appears that there was no serious intention for execution of the work on the part of the Agency, as per the revised programme which was approved by the NHAI officials also. 7. Learned counsel for the State Mr. Rajeev Ranjan Mishra has placed on record three affidavits, one each by the Mining Department, Road Construction Department and Forest Department. Affidavit on behalf of the Mining Department shows that out of 04 leases falling within the district of Ranchi, violations were reported by the DEAC to the Deputy Commissioner but the matter has been placed for reconsideration before the District Level Environmental Appraisal Committee in relation to the remaining one lease, there was a dispute because of an agreement executed by the raiyat with another Agency namely RCM Infrastructure Ltd. which was however cancelled later on. Respondent have received an opinion from the Government Advocate in that regard and suitable decision is going to be taken on that. 8. Affidavit of the Road Construction Department shows that land acquisition for additional land, as per the requisition of NHAI, required for mismatch of ROW. Missing Plots, etc. in Turup, Mahiling, Haratu and Silwai is in the process, complete proposal for additional land in mouza Neori, Hesal, Chatra and Gadke has not been received from NHAI, once it is received it shall be processed by the district authorities; land in mouza Badam and Kewali is notified forest regarding which NHAI has been asked to submit proposal for diversion of the forest land, necessary interaction with the NHAI authorities are being undertaken for resolving the outstanding issues. 9. The third affidavit on behalf of the forest officials, apart from disclosing the background facts in relation to the forest clearance in the stretch of NH-33, states that the State Government has forwarded a proposal to the Government of India for approval of diversion of 11.3738 hectares of forest land in place of the previous stage-I approval of 9.7691 hectares of forest land by letter No. 4403 dated 24.10.2017. In this proposal, there is no wildlife sanctuary involved, but an area of 4.117 hectares of Dalma Wildlife Sanctuary falls within 45 meter ROW (Right of Way) of NH-33 regarding which, no diversion proposal has been made. This will need to be de-notified for which, if user agency needs to submit a proposal. NHAI has not submitted any proposal in this regard. 10. According to the learned counsel for the State, on each aspects, as indicated in these three affidavits, officials of the State Government have been taking prompt steps. The stand of the respondent State however does not show that existing encroachment or structures falling on the Right of Way on NH-33 which is undergoing expansion, has been removed or not at different places. Learned counsel for the State would also seek instruction as to the number of road accidents and fatalities that has occurred in the stretch of NH-33 during the period from 01.01.2011 till date and apprise the Court on the next date. 11. Learned counsel for the Bank submits that a detailed affidavit would be filed on their behalf giving comprehensive picture of the entire financial transaction with the Company in question. They would also disclose the status and details of the Principal Holding Company, Promoters, Directors who have set up the Special Purpose Vehicle (SPV) and the security which have been furnished for advancement of the loan. 12. As we have observed in our previous orders, the lender bank has advanced a sum of Rs. 919.73 crores to the Agency, out of which, it had expended Rs. 408.14 crores and achieved only 44% of the work till July 2017. The entire narrative above once again goes to show that this project on a very important national highway, recognized as commercial lifeline of the State, has not been executed with any seriousness within the stipulated time nor progress of the work more than two and half years thereafter inspires confidence in the ability of the Agency to execute the work. Precious time of the Court has been consumed while monitoring the progress of the work recognizing its public importance. However, we feel constrained in the matter as different stakeholders involved in the execution of the work, have not shown their commitment. Precious time of the Court has been consumed while monitoring the progress of the work recognizing its public importance. However, we feel constrained in the matter as different stakeholders involved in the execution of the work, have not shown their commitment. The manner in which work has been executed by the Agency and supervision by the NHAI and advances that have been given by the lending bank without commensurate physical progress, creates an impression that there is something seriously amiss in the execution of such a large public project involving Rs. 1654 crores. Reference may be made to the previous orders dated 02.08.2017, 09.08.2017, 22.08.2017 and 20.09.2017. A specialized Authority may be required to enquire into the matter. We therefore implead the Ministry of Corporate Affairs through its Secretary, Government of India. The Serious Fraud Investigation Office through its Director under the Ministry of Corporate Affairs, Government of India and Ministry of Surface Transport and Highways through its Secretary, Government of India as party respondent in this case. Let such addition be carried out by the Registry. Learned ASGI Mr. Rajiv Sinha accepts notice on behalf of the newly added parties and undertakes to obtain instruction in this regard. 13. The order passed today should, in no way, intend to mean that execution of the work in the meantime be retarded or put in abeyance. The Agency, NHAI and State would keep on filing their progress report in the matter as well. The respondent Bank would also file their comprehensive affidavit by the next date. It would be proper that the Member, Project. NHAI is also present on the next date. 14. Post the matter on 14.11.2017. Ordered accordingly.