Title - HC upholds stay on Maharashtra Airport Development Corporation plan to change rail terminal contract

NAGPUR: In a decision which may put the ambitious cargo hub in Nagpur on hold till a courtroom battle ends, the high court has rejected MADC's plea to vacate a stay on granting Indian Railways' subsidiary M/s Concor the contract to develop a rail terminal at Mihan. As an attempt to revive the cargo hub plans, on which the concept of Mihan is based, MADC had earlier this year awarded the contract to Concor. It had done this after terminating the deal with earlier contractor Nagpur Gupta Sical Logistics (NGSL), citing non-performance.

NGSL, which also had Maharashtra Airport Development Corporation (MADC) as partner, says the work could not begin as the state government company did not provide 24 hectares of land required for the job. When MADC terminated the deal with NGSL and tied up Concor, NGSL filed a case in the lower court and got a stay on the deal. MADC filed an appeal with Nagpur bench of Bombay High Court, seeking to overturn the stay, but the plea has been turned down in a ruling issued on Wednesday.

NGSL's original suit had stated that handing over the contract to Concor would hamper's its business interests, and called termination of its contract arbitrary. MADC alleged NGSL was not going ahead with the work since 2006, when it was awarded the contract. But NGSL countered that it could not start work as it was not provided land on which the rail terminal was to be built.

The high court's order says that MADC does not have any right to strike down the contract merely because another developer had offered a higher bid. Moreover, if the entire land was ready for possession, it was open for MADC to call upon NGSL to take it over and start development activities. MADC can monitor the work undertaken by NGSL going forward and take suitable action according to law, said advocate Masood Sharif who appeared on behalf of NGSL.

With the stay remaining in place, Concor will not be able to take over the work till the lower court decides the case finally. However, now that NGSL has moved court against the deal being awarded to Concor, it will have to go ahead with the work in case the final decision is in its favour.

Padmesh Gupta, chairman of Gupta Group, the joint venture partner in this company, refused to comment. However, a senior official in NGSL said that with Sical Limited, one of the partners in this venture, being taken over by Cafe Coffee Day Group, the company is very serious about taking up the project.

MADC vice-chairman-cum-managing director UPS Madan said the company will decide its next step after reading the order thoroughly.

The terminal would have been a part of the cargo hub operations, which conceived all three modes of transport - rail, road and air, at Mihan - Multimodal International Hub and Airport at Nagpur.

NGSL had got the contract to develop a road terminal, which is also shrouded in dispute. The matter has been referred for arbitration at Mumbai. "The MADC wanted us to start off with the road terminal first. However, it was not a feasible proposition as the rail terminal had to come first. This could have attracted cargo from outside Mihan too, unlike the road terminal," said a source in NGSL.

NGSL also alleges that MADC has allotted land to Future Group for its warehousing project at much easy terms, which may also hamper its business interests.