Contract and Infrastructure Projects

Contract and Infrastructure Projects

Author: Mr. Mudit Saxena, Galgotias University

What are Infrastructure Projects?

Infrastructure Projects are the heart and soul of the development of a nation. It is the foundation on which the economic blooming of a country depends. They are important functions that keep the country alive. They are responsible for the proper delivery of goods, proper transportation facilities, electricity and water supply to homes and businesses. It also incorporates proper waste management systems as well. It is these projects which decide the growth of a nation.

There are following types of Infrastructural Projects:

  • Highways, Streets and Roads
  • Bridges
  • Electricity- Hydroelectricity, Thermal Electricity, etc.
  • Airways, Waterways and Land ways
  • Water supply- Water Treatment Plants etc.
  • Waste Management- Water Waste, Hazardous Waste
  • Telecommunication

Laws governing Infrastructure Projects in India

Investment in infrastructure projects is of epitome importance in countries like India and also channelizing and supervising the investment and project is also equally important. Therefore, there must be adequate laws to be enforced to ensure the proper growth of the country via infrastructural projects. India through its economic liberalization is heading to achieve revolutionary growth. This is the reason the government has focused a lot upon the infrastructural projects as they are the backbone of the growth of the country. Hence, a varied legal framework is very important to channelize infrastructural projects in the country.

The current laws governing the infrastructural sectors of the country are as follows:

  • Power: Electricity Act, 2003
  • Airports: Government’s Policy on Airport Infrastructure, 1997; Airport Authority of India Act, 1994; Aircraft Act, 1934; Aircraft Rules, 1937
  • Roads: National Highways Act, 1956 and National Highways Authority of India Act, 1988
  • Water: National Water Policy, 2002
  • Railways: The Railways Act, 1989
  • Ports: Major Ports Trusts Act, 1963 and its amendments
  • Oil and Natural Gas: Safety in Offshore Operations Rules ,2008; The Petroleum Act,1934; The Oil Fields Act,1948; The Petroleum Pipelines Act,1962; P & N G Rules,2009; Petroleum Amendment Rules,2011; the Oil Industry Act,1974
  • Telecommunications: Telecom Regulatory Act, 1997

Infrastructural Project and The Indian Contract Act

India presently positions 100th out of 190 nations in the simplicity of working together record and 164th in the list for upholding contracts. The administration of India has started a few key changes that have contributed to this move-in perception, the latest of which is the Specific Relief (Amendment) Act, 2018 (SPECIAL RELIEF Amendment Act), which tries to revise the Specific Relief Act, 1963 (SPECIAL RELIEF Act) and rearrange the process of the requirement of contracts. The reliefs provided can be understood clearly by the judgment of Adhunik Steels Ltd vs. Orissa Manganese Minerals (P) Ltd (2007) 7 SCC 125.

The SPECIAL RELIEF Act gave wide optional forces to the court to uphold specific execution of any contract, which depended on two essential standards –

(a) When there existed no standard for discovering the actual harm brought about by non-execution of the contract; or

(b) When paying in cash was not sufficient to cure the break of contract. Thus, under the SPECIAL RELIEF Act, fiscal remuneration (which is represented by the Indian Contract Act, 1872) was the standard and specific presentation of contract (under the SPECIAL RELIEF Act) was the exemption to the standard.

The SPECIAL RELIEF Amendment Act was passed by the Rajya Sabha on July 23, 2018, and got the presidential consent on August 1, 2018. It has essentially revised the SPECIAL RELIEF Act and achieved major developments in the law on the requirement of contracts.

It accommodates uncommon arrangements comparable to contracts identifying with framework ventures. The timetable to the SPECIAL RELIEF Amendment Act rattles off the classes of tasks as transport, vitality, water and sanitation, correspondence, and social and business foundation. The timetable accommodates foundation sub-divisions inside every one of these principle classes of undertakings. The SPECIAL RELIEF Amendment Act engages the focal government to change the calendar identifying with any classification of ventures or foundation sub-areas, contingent on the prerequisite for improvement of any task.

The revisions, which significantly affect the improvement of framework ventures are as beneath:

Courts have been restricted from giving directive in suits under the SPECIAL RELIEF Amendment Act including a contract identifying with a framework venture, where the award of the order would cause an obstacle or postponement in the advancement or fulfillment of such foundation venture (Section 20A);

Courts are disallowed from conceding a never-ending directive on the off chance that it would hinder or postpone the advancement or finishing of any framework projector meddle with proceeded with an arrangement of a related office or administration (area 41 (ha)); and it requires each state government (in meeting with the central equity of the high court) to establish at least one common courts as unique courts to attempt suits under the SPECIAL RELIEF Amendment Act, in regard of contracts identifying with foundation ventures (segment 20B).

The framework segment will assuredly profit by the alterations presented by the SPECIAL RELIEF Amendment Act, which is a positive development. The law-making body has given the expectation that framework tasks will be finished on schedule, by perceiving contracts identifying with foundation extends as an extraordinary class of contracts and restricting the courts from conceding impermanent or perpetual order according to such contracts if such relief would prompt deferral. Giving statutory acknowledgment to the idea of subbed execution at the expense of the defaulting party is probably going to improve the execution of undertaking contracts by contractors/concessionaires, without the obstruction of referees and courts. Steps, for example, engaging the court to name specialists will empower quick goals of debates, since framework contracts typically include complex specialized and logical issues, requiring specific information and aptitude in different fields. Setting up particular courts to hear suits including foundation contracts, combined with time-bound goals inside 12-year and a half will additionally facilitate the bottlenecks influencing the division and lift speculator certainty.

Starting at now, the changes can without a doubt be seen as a silver covering. The genuine impact on the framework segment would anyway rely on how the SPECIAL RELIEF Amendment Act is executed.

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