Infrastructure Projects, Special Courts and Expeditious Disposal

Broken down

Three conditions must be satisfied before the bar applies.

1. A suit under this Act.
2. Involving a contract relating to an infrastructure project specified in the Schedule.
3. The injunction would cause impediment or delay in the progress or completion of the project.

The bar is not on injunctions in infrastructure disputes generally. It bites only where the injunction would impede or delay the project. An injunction that leaves the works untouched, for example one restraining the encashment of a guarantee where that does not affect the site, is outside the section on its own terms.

The Schedule defines the class. "Infrastructure project" means the category of projects and infrastructure sub sectors specified in the Schedule, and the same definition governs section 20B and section 41(ha). The Schedule covers the familiar categories: transport, energy, water and sanitation, communication and social and commercial infrastructure, each with listed sub sectors.

The Schedule can be amended by the Central Government by notification, and every notification must be laid before each House of Parliament for a total period of thirty days.

Section 41(ha) carries the same rule into the general law of injunctions: an injunction cannot be granted "if it would impede or delay the progress or completion of any infrastructure project or interfere with the continued provision of relevant facility related thereto or services being the subject matter of such project". See [When an Injunction Cannot Be Granted].

Section 20B: Special Courts

"The State Government, in consultation with the Chief Justice of the High Court, shall designate, by notification published in the Official Gazette, one or more Civil Courts as Special Courts, within the local limits of the area to exercise jurisdiction and to try a suit under this Act in respect of contracts relating to infrastructure projects."

Four features.

"Shall designate", so the obligation is mandatory.

"In consultation with the Chief Justice of the High Court", which protects the independence of the designation.

Existing Civil Courts are designated, not new courts created. So no separate cadre or infrastructure is required.

The jurisdiction is confined to suits under this Act in respect of contracts relating to infrastructure projects. Ordinary specific performance suits stay where they were.

Section 20C: twelve months

"Notwithstanding anything contained in the Code of Civil Procedure, 1908, a suit filed under the provisions of this Act shall be disposed of by the court within a period of twelve months from the date of service of summons to the defendant:

Provided that the said period may be extended for a further period not exceeding six months in aggregate after recording reasons in writing for such extension by the court."

Four points that a good answer makes.

It overrides the Code, by its non obstante clause.

Time runs from the service of summons on the defendant, not from filing.

Twelve months, extendable by six, and the extension is capped in aggregate, so the outer limit is eighteen months.

Reasons must be recorded in writing for any extension.

It applies to every suit under the Act, not only to infrastructure suits. That is the point most often missed.

The three sections in a table

A worked example

Tejas Infra is building a State highway, a project within the transport category of the Schedule. It engages Uma Engineering to supply and lay the bituminous surface. A dispute arises.

• Uma sues and asks for an injunction restraining Tejas from engaging another contractor to lay the surface. Granting it would halt the surfacing, and so would cause impediment or delay in the progress of the project. Section 20A bars it, and section 41(ha) does the same in the general law of injunctions.
• Uma instead asks for an injunction restraining Tejas from encashing a bank guarantee, the works being unaffected. On the section's own words the bar applies only where the injunction would cause impediment or delay. If encashment does not touch the progress of the works, section 20A does not bar this relief, though the ordinary law on injunctions against bank guarantees still applies.
• Which court hears the suit? Under section 20B the State Government, in consultation with the Chief Justice of the High Court, designates one or more Civil Courts as Special Courts for suits under the Act on infrastructure contracts, and the suit goes there.
• How long may it take? Under section 20C it must be disposed of within twelve months from service of summons on the defendant, extendable by not more than six months in aggregate, and only for reasons recorded in writing.
• A quite separate suit for specific performance of a flat sale is filed the same week. Section 20A and section 20B do not apply, there being no infrastructure project. But section 20C does: it governs every suit under the Act.
• The Central Government adds a new sub sector to the Schedule. It may do so by notification, which must be laid before each House of Parliament for a total period of thirty days.

What it does NOT mean

"No injunction can ever be granted in an infrastructure dispute." The bar applies only where the injunction would cause impediment or delay in the progress or completion of the project.

"Infrastructure project means any large construction." It means the categories and sub sectors specified in the Schedule, as the Explanation to section 20A says.

"Special Courts are new courts." Existing Civil Courts are designated as such.

"The State Government designates them alone." It must act in consultation with the Chief Justice of the High Court.

"Section 20C applies only to infrastructure suits." It applies to a suit filed under the provisions of this Act, so to all of them.

"The twelve month period runs from filing." It runs from the date of service of summons to the defendant.

Quick revision

• ss.20A, 20B and 20C inserted by the Specific Relief (Amendment) Act 2018, in force 1 October 2018, with the Schedule.
• s.20A: no injunction in a suit under this Act involving a contract relating to an infrastructure project specified in the Schedule where it would cause impediment or delay in the project's progress or completion. Explanation defines "infrastructure project" for ss.20A, 20B and 41(ha). The Central Government may amend the Schedule by notification, laid before each House for thirty days.
• s.41(ha) carries the same bar into the general law of injunctions.
• s.20B: the State Government, in consultation with the Chief Justice of the High Court, SHALL designate one or more existing Civil Courts as Special Courts for suits under the Act on infrastructure contracts.
• s.20C: notwithstanding the Code of Civil Procedure 1908, every suit under the Act shall be disposed of within twelve months from service of summons on the defendant, extendable by not more than six months in aggregate, for reasons recorded in writing.
• s.20C is not confined to infrastructure.

Test yourself

1. What does section 20A provide? That no injunction shall be granted by a court in a suit under the Act involving a contract relating to an infrastructure project specified in the Schedule, where granting the injunction would cause impediment or delay in the progress or completion of that project. The Explanation defines "infrastructure project", for that section, section 20B and section 41(ha), as the category of projects and infrastructure sub sectors specified in the Schedule.

2. Is every injunction barred in an infrastructure dispute? No. The bar operates only where the injunction would cause impediment or delay in the progress or completion of the project. Relief that does not touch the works, such as an order that leaves the site and the schedule unaffected, falls outside the section on its own terms, although the ordinary principles governing that relief continue to apply.

3. How are Special Courts constituted under section 20B? The State Government, in consultation with the Chief Justice of the High Court, shall by notification in the Official Gazette designate one or more existing Civil Courts as Special Courts, within the local limits of the area, to exercise jurisdiction and try suits under the Act in respect of contracts relating to infrastructure projects. The obligation is mandatory and no new courts are created.

4. What time limit does section 20C impose, and on what suits? Notwithstanding the Code of Civil Procedure 1908, a suit filed under the provisions of the Act must be disposed of within twelve months from the date of service of summons on the defendant, extendable by a further period not exceeding six months in the aggregate after the court records reasons in writing. It applies to every suit under the Act and not only to those concerning infrastructure projects.

5. How may the Schedule be changed? The Central Government may, depending on the requirement for the development of infrastructure projects and if it considers it necessary or expedient, amend the Schedule relating to any category of projects or infrastructure sub sectors by notification in the Official Gazette; and every such notification must be laid before each House of Parliament, while it is in session, for a total period of thirty days.