Govt Tables Bill To Curb Judicial Interference in Infrastructure Projects

New Delhi: The Union government has tabled a bill to amend the Specific Relief Act of 1963 in a bid to ease concern of consumers facing stalled residential projects and real estate developments with infinite delay.

The proposal for the amendment bill was passed by the Union Cabinet after a five-member expert committee suggested that the act be amended to "remove bottlenecks in execution of contract-based infrastructure development, public private partnerships and other public projects."

The premise of the report was public work should not be halted and that the interference of the courts should be to a minimum extent.

This bill, which is set to be debated in the parliament, bars courts from granting injunctions in matters of infrastructure projects and order specific performance of the contract.

Section 20A to the amendment bill also allows the government to set up special courts to hear cases of disputes within a stipulated time of a year and has a ground for six months extension, provided reasons are recorded there in.

The bill directs the DEA Nodal Agency to specify categories of infra projects where injunction can't be granted. Injunction can't be granted for transport, energy, communication and social infrastructure projects, according to the bill.

The proposed law aims to make specific performance with respect to contracts a general rule rather than exception.

A substitute performance of contract clause has also been introduced in the bill "where a contract is broken, the party who suffers would be entitled to get the contract performed by a third party or by his own agency and to recover expenses and costs, including compensation from the party who failed to perform his part of contract".

The government in the object and reasons have stated that the old act is not in consonance with the rapid economic growth happening in the country. Enforcement of contract is the general requirement of activities such as FDI, Public Private Partnerships (PPPs) and they the way court interferes in the matter, it ends up “awarding damages in a majority of cases and orders of specific performance is only an exception".