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Informist, Tuesday, Jun. 9, 2026

 

--HC bars Mumbai Pune Expressway from recovering INR-1-bln from IRB Infra arm 

 

NEW DELHI – The Bombay High Court has restrained Mumbai Pune Expressway Ltd. from recovering INR 1.1 billion from IRB MP Expressway Pvt. Ltd., a subsidiary of IRB Infrastructure Developers Ltd., either by encashment of bank guarantee or other means. There is substance in the arguments made on behalf of IRB MP Expressway that serious prejudice, injustice and irretrievable loss are likely to be caused to it if Mumbai Pune Expressway recovers the amount for which benefit is already granted to the plaintiff by way of compensation in lieu of loss of toll collection, said the high court. 

 

IRB MP Expressway has made out a prima facie case, showing irreparable loss and injustice, and the balance of convenience also lies in favour of the plaintiff for seeking an interim injunction. The apprehension expressed by IRB MP Expressway regarding the threat to recover the amount and the invocation of the bank guarantee is genuine, it said. 

 

The high court said that there was a written agreement between the parties for the grant of compensation by Mumbai Pune Expressway to the petitioner, therefore, the defendant was not entitled to reverse or revoke the same after a period of two years on the ground of an internal communication received from the accountant general. At this preliminary stage, based on an internal communication, IRB MP Expressway cannot be deprived of the benefit of the adjustment already granted in lieu of the loss of toll collection, said the court.

 

The case has its genesis from IRB MP Expressway and Mumbai Pune Expressway entering into an agreement for toll collection, operation, maintenance, and transfer of the Yashvantrao Chavan Expressway National Highway in Maharashtra. A sub-concessionaire agreement signed between the parties in 2020 granted IRB MP Expressway sole and exclusive right to demand, collect and appropriate the fee from the users of the project comprising Yeshwantrao Chavan Expressway along the Mumbai-Pune corridor. 

 

Due to COVID-19 pandemic restrictions, IRB MP Expressway sought benefit for "force majeure cost" as there was a "Political Force Majeure Event" under the agreement. Mumbai Pune Expressway agreed that the lockdown constituted a force majeure event and offered to adjust the reduced toll income for the lockdown period. Mumbai Pune Expressway also offered compensation, which IRB MP Expressway accepted and agreed to adjust the reduced toll income from the interest part of the upfront subconcession fee. Hence, there is a mutual written agreement between the parties that would entitle the plaintiff to adjust the computation of the upfront sub-concession fee, said IRB MP Expressway. 

 

However, Mumbai Pune Expressway noted the Comptroller and Auditor General of India's report that raised serious questions on whether such compensation could have been granted to IRB MP Expressway under the terms of the sub-concession agreement. The auditor general noted that the COVID-19 lockdown was a "Non-Political Force Majeure Event", as it was an epidemic. Therefore, no waiver of revenue or compensation can be granted, it said. Consequently, Mumbai Pune Expressway asked IRB MP Expressway to remit the compensation amount with interest and threatened action in terms of the agreement. 

 

Thereafter, IRB MP Expressway filed a suit for a declaration that the agreement between the companies was valid, subsisting, and enforceable, under which the defendant granted an adjustment and gave compensation to it. In the interim, IRB MP Expressway sought an injunction restraining Mumbai Pune Expressway from recovering INR 1.1 billion.  

 

At 1044 IST, the shares of IRB Infrastructure Developers Ltd. were up 0.8% at INR 20.81 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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