Ms. Nandadevi; Mr. Rohan; Ms. Maryam v. National Highways Authority of India & Anr

1. This is with reference to the Consultancy Contract Agreement dated 28.02.2022 between Highway Engineering Consultant (“IE/Consultant”) and National Highways Authority of India (“NHAI/Authority”) for consultancy services for Six laning of Ramanattukara to Valanchery Section from design Ch. 258+818 to design Ch. 298+500 of NH-66 in Kerala on Hybrid Annuity Mode.

2. On 19.05.2025, a section of the main highway under your services collapsed i.e. LHS of main carriageway (“MCW”), service road, and associated structures (retaining wall and RE wall) at Chainage 276+800 to 277+050 (LHS) collapsed and settlement of embankment of MCW was observed (“Structure Failure”). The said Structure Failure indicated failure of the IE to fulfill its obligations in reviewing the design and supervision of the work, assessing the actual ground conditions, and ground improvement methodology proposed etc., resulting in a major failure.

3. The Authority constituted an independent panel of experts comprising of 1) Prof. G V Rao, former Head of Civil Engineering Department, IIT Delhi, 2) Dr. Anil Dixit (PhD IIT Delhi), Geotechnical Consultant, 3) Dr. Jimmy Thomas (PhD IT Kanpur), Geotechnical Consultant and Guest Professor IIT Gandhinagar, and 4) Dr. Kolli Mohan Krishna (PhD IIT Gandhinagar), Geotechnical Consultant, to analyse and investigate the cause and reasons of the failure. Two members of the said panel inspected the site on 21.05.2025 along with the representatives of NHAI, your representative and the Concessionaire. The Expert Committee submitted their Preliminary Investigation Report dated 27.05.2025, which shows that the construction of the project was done without critical analysis of the prevalent ground conditions and without ensuring proper ground improvement. Under Clause 4 of TOR, you were obligated to carry out a detailed review of the drawings, data including geotechnical and hydrological investigations, characteristic of materials from borrow areas and quarry sites, etc. However, you failed to discharge your responsibility by not properly assessing actual ground conditions and not evaluating the detailed soil investigations/assessment report furnished by the Concessionaire for your review of the design before you approved the same for construction on 27.09.2023. It primafacie established that construction was undertaken, in absence of a fair and prudent assessment of the characteristics of the soil. Further as per your letter dated 06.06.2025, you have attributed the cause of failure because of water submergence and low bearing capacity of soil and a reference was also made to State PWD’s circular dated 10.09.2018 for review of hydraulic particulars and vent ways requirement in view of recent flood. However, despite knowing that the surrounding areas are paddy fields where stagnation of water happens in monsoon, you had failed to consider these facts while approving the design, which clearly shows your failure in performing your obligations as per the Agreement.

4. Your negligence is also established by the concessionaire’s admission in its response dated 27.05.2025, which states that data from boreholes were collected by the Concessionaire during conducive weather conditions which formed the basis of his designs. You are very well aware that data collected during conducive weather conditions for a site which is exposed to submerged condition for certain period of time of the year, does not represent the actual condition at site. However, you overlooked the same while according approval.

5. It was your obligation to conduct a detailed review of the designs and works of Concessionaire, including geo-technical and hydrological investigations and ensure necessary compliance by the Concessionaire in accordance with Specifications and Standards and good industry practice. But you failed to analyse the design submitted by the concessionaire. Failing to ensure that is a material breach of the terms and conditions of the Consultancy Agreement. The design should have been checked to ensure that these designs are safe for design loads and adequate for prevailing hydrology and soil conditions at site. A fair assessment of adjacent prevailing marshy/weak soil should also have been considered in your assessment. Your failure is clearly reflected from your inability to effectively review the design to match the physical and engineering properties of the subsoil. It was your duty to review and furnish comments on the detailed design, drawings, construction methodology and suggest measures in the documents in the interest of progress, quality and safety of construction.

6. It is pertinent to mention that the expert committee, inter-alia, made the following observations in its preliminary report dated 27.05.2025: a. Geotechnical Investigation was carried out in connection with the structures (MNB & VUP) but no subsurface investigation has been carried out specifically for the reinforced soil/ earth walls or embankments. It is not clear what tests were considered to assess the in-situ conditions of the site. b. In design calculations for RE Walls, the actual subsurface strata were not considered. The calculations regarding bearing capacity, global stability and settlement were not in order and significant considerations were ignored. i. Bearing Capacity: The Expert Committee observed that the Simple 2V:1H dispersion as adopted by RE Walt Designed for footings below columns or walls, should not have been considered for a RE Wall, which is retaining an embankment. ii. Globality Stability: The committee observed that several considerations in the global stability analysis are at major variance with the actual situation on the ground. Shear strength parameters from laboratory tests on remoulded samples were used for the soil strata, these samples were not fully saturated. However, in the field, the clay stratum below water table would be fully saturated and its response would be undrained under high rate of loading due to embankment construction reducing the factor safety far lower than initial obtained figures and minimum factor of safety as stipulated in IRC:SP:102-2014. Moreover, the geological site conditions and situations were not considered in design as the design should have foreseen long term fluctuations of water table and the highest possible elevation of the ground water table as the concerned Project site is situated in the paddy field and in August 2024, the water has risen appreciably above the ground level. iii. Settlement Consideration: It was a failure on part of Consultant to not assess the settlements at the site especially considering the large width and height of the embankment and presence of clay strata at the site. Such assessment should have been included to determine the stability and serviceability of the RE Walls and the embankment.

7. Such deficiencies caused global stability failure. As illustrated in Analysis 4 of the Preliminary Report, which was carried out to analyse the situation as existing at the site, reduced the safety factor at 1.01 (far lower than it was required under IRC Manual). It was observed that critical slip circle formed with a radius of 17.45 m which starts close to the centre of the main carriageway with the horizontal width of the slide mass at 34.9m, such prediction closely matches the observed morphology of the collapse zone where lateral extent of the slide mass is in the range of 30-35m. This was considered to be strong evidence by the Expert Committee in their preliminary report that a deep-seated rotational failure of the embankment passing through the foundation strata occurred.

8. The concessionaire in support of the design for RE wall has relied on the boreholes data collected at the location of MNB at 276+795 and VUP at Km 276+900, which indicate poor soil profile. Also, the bearing capacity of the foundation soil has been on the SPT ‘N’ values at the MNB and VUP location. Moreover, the site conditions and good industry practice also demands a more retiable assessment of the shear strength of subsurface strata by employing more advance methods such as vane shear test, static cone penetration test, unconfined compression tests or UU Triaxial test on good quality undistributed samples etc. However, the concessionaire was not advised to undertake such tests to effectively assess the reliability of the construction work. Further, it was also not clear as to why poor soil profile of the boreholes at the location of MNB at 276+795 and VUP at Km 276+900 were not raised by you to Concessionaire for remedial measures. This shows that if you had discharged your obligations properly and effectively, such defects/deficiencies in the work of the concessionaire would have been promptly identified and removed before the global stability failure of the structure.

9. In your response dated 23.05.2025, you admitted that the Concessionaire along with your Key Personnel are responsible for the incident. You further submitted that day to day responsibility of supervision and quality control of various components of the project lies with your Key Personnel and overall supervision of the Project lies with your Head of the Team i.e., Team Leader. However, it was your responsibility under the Contract to effectively review the work of the Concessionaire and you cannot shift the blame to your employees and if according to you, your employees are responsible, then it is an admission of default by you.

10. In your response dated 06.06.2025, you had submitted that the high embankment at Ch.276+8 to Ch.277+05 has been constructed as per approved plan and profile and RE wall on LHS and RHS of this embankment has been constructed as provided in DPR, which is part of the Concession Agreement. It was also mentioned that the Concessionaire has engaged M/s Strata Geo Systems (India) Pvt. Ltd. And M/s HBS Infra Engineers Pvt. Ltd. as their Design Consultant. This submission by IE does not absolve the fact that IE was, as per the Agreement, duty bound to review the design before construction can commence.

11. In your responses you also put reliance on the past incidents with similar distresses and Technical Circular of State of Kerala, recommending more land spans. This is not tenable as the restricted ROW of 45m was known to all stakeholders from the start of the project. Ensuring safe design of the project was your responsibility, and it is unfathomable as to why did you not incorporate such recommendation in the designs of the Concessionaire by taking into account waterlogged and submerged area, adjacent land use (paddy fields) and poor site strata. A prudent consultant should have included such information and its effect on bearing capacity of the ground into its assessment. Therefore, your claim to limit yourself only with the construction of Earth Retaining Structures as per Appendix B-XVI of the Concession Agreement without proper geotechnical investigation, hydrology study and site conditions, is a breach of your obligations under the Contract and an unlawful attempt to reduce your scope of work originally envisaged under TOR. Your reliance in your reply on Wayanad incident in July, 2024 and distresses experienced in Thalassery- Mahe Bypass is also not helpful to you in the present case, where you miserably failed to study sub-soil conditions and suggest proper ground improvement at the foundation of RE Wall.

12. Also, the modification suggested now for a Viaduct is only because of your negligence and failure in ensuring construction of the project initially with sufficient ground strengthening/ improvement, which resulted in failure of the foundation soil. Present suggestion of Viaduct in this stretch does not mean that previous approach was unviable and freed you from wrongdoings. In fact, ensuring safe design and construction was your responsibility and both methods i.e. ground improvement and viaduct could have worked. But you did not ensure adequate ground improvement. In any case you did not suggest viaduct before construction of RE Wall was undertaken.

13. Even after the incident, your negligent conduct continued. The Authority on the same day of the incident vide letter dt. 19.05.2025, directed you to immediately visit the site and carry out a detailed assessment with your reasons and analysis of failure within 3 days i.e., by 22.05.2025. However, no report has been submitted till now.

14. Further, despite enjoying the stay under the Hon’ble High Court directions vide order dt. 27.05.2025 in W.P. (C) 7494/2025, you failed to uphold your assurances and undertaking given to the Hon’ble Court by repeatedly asking for postponement of personal hearing with your excuses. Moreover, even after such accommodation by the Authority despite clear direction of the Hon’ble Court, you failed to honestly represent your case. You stated in your response dated 06.06.2025 that investigation report of Expert Committee of NHAI has not been supplied to you even though the same was supplied to you vide letter dated 03.06.2025 and 05.06.2025, along with revised personal hearing notice. Such falsehood is further reflected in your response wherein the expert committee report findings are reproduced by you with every minute detail.

15. From the above, it becomes evident that the Consultant has defaulted in ensuring incorporation of adequate ground improvement, drainage, and embankment protection measures in its assessment while reviewing designs and drawings, to mitigate any risks. Had the Consultant carried out its obligations and responsibilities, such structural failure would have never occurred. This has endangered the Public Safety and has now significantly delayed the project.

16. A personal hearing was given on 09.06.2025. Thus, after considering the above facts, your responses & Preliminary Report, the Competent Authority of NHAI, finds it proper and suitable to suspend you from participating in ongoing/future bidding for one month or till completion of investigation by the expert committee whichever is later during which the regular process of debarment or otherwise shall be concluded. The instant order is being issued with the approval of the competent authority and without prejudice to the Authority’s right to exercise any other right or remedy, which may be available now or in future under the applicable laws. Yours Sincerely, -Sd- (W.Blah) I/c CGM(T)-KL, NHAI HQ”

3. The controversy arises in the background of the respondent no. 1 inviting bids [vide Notice Inviting Tender (NIT)] dated 21.10.2020 for “Independent Engineer Services for Six Laning of Ramanattukara Junction to start of Valanchery bypass section of NH – 66 (old NH-17) from Design Ch.258+818 (Ex. Km 27.840 of Kozhikode bypass) to Design Chainage298+500 (Ex. km 304.250) in the state of Kerala on Hybrid Annuity Mode under Bharatmala Pariyojana”.

4. The petitioner was awarded the work as the ‘most preferred bidder’ and received the Letter of Award on 17.02.2022 for an amount of INR 6,70,75,365/-. Subsequently, a consultancy agreement was executed on 28.02.2022 between the petitioner and respondent no. 1. It is submitted that the petitioner’s roles and responsibilities were provided under Clauses 3 and 4 of the Terms of Reference (TOR). In terms thereof, the primary role of the petitioner was to review the drawings furnished by the Concessionaire, including geo-technical and hydrological investigations, characteristics of materials from borrow areas and quarry sites, topographical surveys and traffic surveys.

5. It is submitted that on 31.07.2024 the petitioner flagged the issue of water stagnation on the service road between Km 276+800 to 277+000 RHS and requested the Concessionaire, M/s KNR Ramanattukara Infra Pvt. Ltd., to review the designs in light of the monsoon season. The Concessionaire responded on 13.08.2024, denying any deficiency in the design, and attributing the stagnation to delay in construction of drainage outlets, which it later claimed to have addressed.

6. Subsequently, on 19.05.2025, an incident of structural failure was reported in the embankment and RE wall between Chainage 276+800 to 277+050. Consequently, the respondent no. 1 constituted an Expert Committee to investigate the cause of failure.

7. It is submitted that the respondent no. 2/ MoRTH, through a press release dated 22.05.2025, stated that the failure had likely occurred due to the inability of foundation soil to support the embankment, and prima facie attributed the failure to the Concessionaire’s negligence in assessing and preparing the site.

8. The contention of the petitioner is that notwithstanding the above, the respondent no. 1 issued a Show Cause Notice dated 22.05.2025 (SCN) to the petitioner proposing a penalty of₹20 Lakhs and a one -year debarment, and also suspended the petitioner from participating in future bids for one month or until the completion of investigation. The said SCN is reproduced as under –

9. The petitioner submitted a reply dated 23.05.2025 to the Show Cause Notice, highlighting that no final conclusion had yet been drawn by the Expert Committee and that prima facie, as per MoRTH’s own press release, the Concessionaire was found to be at fault. The petitioner also referred to a past incident involving a span collapse in Gurugram on 22.08.2020, where only a monetary penalty was imposed on the Consultant.

10. Aggrieved by the suspension, the petitioner approached this Court by filing W.P.(C) No. 7494/2025. Vide order dated 27.05.2025, this Court stayed the operation of paragraph 4 of the Show Cause Notice and directed the respondent no.1 to provide the petitioner with an opportunity of personal hearing.

11. On the same day, i.e., 27.05.2025, the Expert Committee submitted its preliminary report. It flagged several deficiencies, such as bearing capacity check, global stability analysis, safety margin, and settlement analysis, and identified the failure as a deep-seated rotational failure of the embankment through the foundation soil. The relevant portion of the preliminary report of the expert committee is reproduced as under –

12. Although a hearing was scheduled for 28.05.2025, the petitioner sought a short adjournment of 15 days.

13. It is submitted that on 05.06.2025, the respondent no. 1 communicated to the petitioner that a personal hearing had been fixed for 09.06.2025 at 11:00 AM. A copy of the preliminary report of the Expert Committee was also provided along with the hearing notice.

14. The petitioner vide letter dated 06.06.2025 submitted a detailed reply to the respondent prior to thepersonal hearing scheduled on 09.06.2025.

15. The petitioner attended the personal hearing. However, the petitioner contends that the hearing was conducted in a perfunctory manner and was a mere formality.

16. It is submitted that the respondent no. 1 ignoring the preliminary nature of the findings and the petitioner’s limited role, proceeded to pass the Impugned Order dated 17.06.2025.

17. Aggrieved by the impugned order and the collateral consequences flowing from it, the petitioner submitted a detailed representation dated 18.06.2025 to the respondent no. 1.

18. The petitioner submits that the said order is arbitrary, disproportionate, and premature. It is submitted that the impugned order contravenes the applicable Standard Operating Procedure (SOP) issued by NHAI vide circular dated 28.08.2020, which mandate that any action against consultants or engineers must be taken only after the Expert Committee has conclusively examined the causes of failure. In the present case, the petitioner has been punished even before such final determination, in violation of law and fair procedure. The relevant portion of the circular dated 28.08.2020 is reproduced as under –

19. Reliance has also been placed on paragraphs 9 of policy circular dated 07.10.2021, issued by the respondent no. 2. Paragraphs 9 of the said circular is reproduced as under:- “9.Upon declaration of non-performer, the AE/IE/CSC/PMC will not be able to participate in any bid for National Highways projects with MoRTH or any other executing agencies till such time the debarment persists or the AE/IE/CSC/PMC is removed from the list of non-performers. The AE/IE/CSC/PMC shall include its JV partners, promoters etc. whose credentials were considered while qualifying them for the project. Non-performer/debarment status of a bidder on the bid due date will be the criteria for eligibility of a bidder to participate in the said bid.”

20. Paragraph 5 of the same circular provides as under:

On the basis of the above, it is submitted that even for the purpose of suspension of the petitioner, the requirements of natural justice has to be read into the aforesaid stipulation.

21. Learned counsel for the respondent submits that based on the findings of the expert committee, NHAI issued a revised show cause notice dated 05.06.2025, enclosing a copy of the preliminary report and scheduling a personal hearing on 09.06.2025, which the petitioner duly attended. The show cause notice dated 05.06.2025 is reproduced as under – “Ref No.: NHAI/12013/Ramanattukara-Valanchery/2022 Date: 05.06.2025 To, Highway Engineering Consultant, Plot No. 29, Second Floor, Room No. 1, Sector-11, Dwarka, New Delhi-110075 Also at: JM-89/3C, behind Panchawati Market, Saket Nagar, Bhopal (M.P.) 462024 Subject: 6- Laning of Ramanattukara to Valanchery section from design Ch. 258-818 to design Ch. 298-500 of NH-66 in the State of Kerala on Hybrid Annuity Mode: Sliding of RCC wall foundation resulting in failure of RE Wall at Ch. 277-000- personal hearing w.r.t. proposed action of temporary suspension Reference:

1. Consultancy Agreement dated 28.02.2022

2. NHAI's letter dated 19.05.2025

3. Show cause notice dated 22.05.2025

4. Reply to show cause notice dated 23.05.2025

5. Order dated 27.05.2025 passed by Hon'ble Delhi High Court in W.P.(C)-7494/2025

6. Our email dated 27.05.2025

7. Your letter dated 28.05.2025 Sir,

1. This is with reference to the Concession Agreement dated 17.06.2021 signed between the National Highways Authority of India ("NHAI" or "Authority") and M/s KNR Ramanattukara Infra Pvt. Ltd. ("Concessionaire") for execution of the subject Project ("Concession Agreement") and the Consultancy Agreement executed between NHAI and M/s Highway Engineering Consultant ("IE") on 28.02.2022.

2. That on 19.05.2025, a section of the main highway constructed by Concessionaire under your supervision collapsed i.e. main carriageway ("MCW"), service road, and associated structures (retaining wall and RE wall) at Chainage 276+800 to 277-050 (LHS) collapsed and settlement of embankment of MCW was observed ("Structure Failure").

3. An Expert Committee was appointed by NHAI under the supervision of Prof. (Retd.) Guda Venkatappa Rao, former Head of Civil Engineering Department, IIT Delhi, to analyse and investigate the reasons for the incident. Two Members of the Expert Committee- Dr. Anil Dixit (PhD, IIT-Delhi) and Dr. Jimmy Thomas (PhD, IIT-Kanpur) inspected the site on 21.05.2025, along with the representatives of NHAI, Authority Engineer and Concessionaire.

4. The Expert Committee had submitted their Preliminary Investigation Report dated 27.05.2025 to NHAI on 28.05.2025. Based on this report comprising of the site inspection, review of available information and global stability analysis carried out, Expert Committee found that the failure is a deep-seated rotational failure of the embankment with the fallure surface passing behind and below LHS reinforced soil (RS) wall through the foundation soil strata and below LHS RCC Retaining Wall.

5. The Expert Committee in its Preliminary Investigation Report dated 27.05.2025, including but not limited to, concluded the following: a. Inappropriate application of engineering judgment in selecting shear strength/ soil parameters; b. Variance between the design assumptions for soil replacement and actual execution; c. Uncritical reliance on the Geotechnical Report without due diligence; d. Omission of key subsurface strata in the design analysis; and e. Inadequate Geotechnical Investigations; f. Deficiencies in bearing capacity, global stability and settlement assessment.

6. The major findings of the Expert Committee w.r.t. Structure Fallure, in its Preliminary Investigation Report dated 27.05.2025, inter alia, are as follows: a) Expert Committee observed: "The RE Wall Designer considered replacement of the foundation soils up to a depth of 2.[5] m below OGL across the full width of the embankment. However, the information given by the Concessionaire to the Expert Panel during the site inspection is that replacement was done for a depth of 0.[5] to 1.0 m below the base of the RCC retaining walls and for a depth of 0.[5] to 1.0 m below OGL for the full width of the embankment, except for the old embankment below the RHS main carriageway. If this is correct, the actual depth of replacement was much less than considered in design..." b) In para 3.2.[1] and 3.2.[2] of the said report records that: "no subsurface investigation has been carried out specifically for the reinforced soil walls or embankments" and "In these design calculations, the actual subsurface strata were not considered..... Bearing capacity and global stability were to be checked separately considering the strata at the specific locations." It is to be noted that the job of the Consultant/ IE to review the design/drawings and to supervise the construction work being carried out by the concessionaire. c) In para 6.[1] & 6.[2] of the preliminary report, the Expert Committee observed that it appears that the foundation strata are not competent to support the loads imposed by the embankment and any ground improvement/soil replacement which has been carried out may not have been adequate. d) In respect of bearing capacity check, the Expert Committee observed that the Simple 2V:1H dispersion as adopted by RE wall Designed for footings below columns or walls, should not have been considered for a RE Wall, which is retaining an embankment. e) With respect to settlement considerations, the Expert Committee observed that considering the large width and height of the embankment and presence of clay strata at the site, settlements should have been assessed. Expert Committee pointed out that the available design reports did not include any settlement analysis. f) Expert Committee, w.r.t. hydrological investigations, also observed that: "The RE Wall Designer had considered ground water table at 2.[2] m depth below GL, same as that was given in the geotechnical report. However, the site is situated in a paddy field and design should have foreseen long-term fluctuations of water table and considered the highest possible elevation of the ground water table. It is understood that during August 2024, water had risen appreciably above the GL. Such possibilities should have been considered in the design."

7. Thus, from the above it appears that the Consultant/ IE has failed to discharge its functions or duties in a fair, impartial and efficient manner, consistent with the highest standards of professional integrity and Good Industry Practice in terms of the Consultancy Contract. Such lack of supervision on part of the IE has resulted in collapse of a section of main highway i.e. failure of main carriageway, service road and associated structures (Retaining Wall and RE Wall), which which could have been prevented at the appropriate stage/ time had the IE took a detailed review of drawings along with supporting data, including the geotechnical and hydrological investigations, characteristics of materials from borrow areas and quarry sites, topographical surveys and traffic surveys and had the IE has properly supervised the construction, in terms of the Consultancy Contract [particularly clause 3(1), 3(11), 3.2, 4.1, 5.[3] and 6.3]. Due to such failure in discharge of its duties, the IE has endangered public safety.

8. NHAI had issued a Show Cause Notice ("SCN") to the IE on 22.05.2025 as to why the proposed action of imposition of penalty of Rs.

20 Lakhs and debarment for a period of 1 year, should not be initiated against the IE. In the same Show Cause Notice, in para 4, the IE was also suspended from participating in ongoing/future bidding for a period of one month or completion of investigation by the expert Committee whichever is later in accordance with Policy Circular No. RW/NH- 33044/76/2021-S&R(P&B) dt 07.10.2021 of MoRTH (mistyped as "06.10.2021" therein) & the circular dated 16.11.2021 of NHAI.

9. Meantime, you approached Hon'ble Delhi High Court challenging SCN dated 22.05.2025. In terms of Order dated 27.05.2025 passed by Hon'ble Delhi High Court in W.P. (C)-7494/2025, NHAI decided to consider the representation dated 23.05.2025 sent by IE against SCN dated 22.05.2025 and to issue a detalled order on the temporary suspension of the IE.

10. Please note that during hearing dated 27.05.2025 of W.P. (C)- 7494/2025, NHAI was directed to decide the SCN dated 22.05.2025 (after considering the IE's reply dated 23.05.2025) based on the undertaking given by Counsel for IE on behalf of the IE that no adjournment/ deferment of the hearing shall be sought by IE under any circumstance. The relevant part of the Order dated 27.05.2025 passed in W.P. (C)-7494/2025 is reproduced below: "8. Learned counsel for the petitioner assures and undertakes that no adjournment/deferment of the hearing/s that may be scheduled, shall be sought by the petitioner under any circumstance. The said statement is taken on record."

11. It was only based on such assurance given on behalf of IE that the Hon'ble Court directed NHAI to give the hearing opportunity to IE within 3 days from 27.05.2025, prior to passing the order on temporary suspension of IE for which the SCN dated 22.05.2025 was issued.

12. Vide email dated 27.05.2025, the NHAI provided a hearing opportunity to the IE (scheduled for 28.05.2025 @05:00P.M.) providing IE a chance of being heard before taking any final decision w.r.t. Show Cause Notice dated 22.05.2025. However, in order to intentionally derail the process of deciding SCN dated 22.05.2025, by citing various reasons in the letter dated 28.05.2025, the IE has asked to provide minimum 15 days' time for personal hearing and to thereby present its case before NHAI.

13. Hence, by giving false assurance in court, the IE is trying to derail the process and causing intentional delay in concluding the process of temporary suspension by seeking at least 15 days' time to appear in personal hearing. Such request of IE, despite giving an undertaking to the contrary before Hon'ble Delhi High Court, amounts to contempt of court.

14. Therefore, you are again provided a hearing opportunity to present your case, more particularly your case related to your suspension, by appearing personally or through authorized representative, as to why you should not be suspended from participating in ongoing/future bidding for 01month period or completion of investigation by the expert Committee whichever is later, on: Date: 09.06.2025 Time: 11.00AM Venue: NHAI HQ, Dwarka.

15. Please note that in case there is non-appearance from your end, either personally or through authorized representative, on the above stated schedule then the NHAI shall decide the SCN dated 22.05.2025 only on the basis of the reply dated 23.05.2025 submitted by you and other material available.

16. This is issued with the approval of the competent authority and without prejudice to Authority's right to exercise any other right or remedy, which may be available now or in future under the applicable laws or otherwise, as the case may be. Enclosure: Preliminary Investigation Report dated 27.05.2025 submitted by Expert Committee Yours Sincerely”

22. The respondent has relied upon the following observations of the expert committee – “Findings of Expert Committee: The Expert Committee in its preliminary report dated 27.05.2025, inter alia, found that:

(i) While carrying out geotechnical investigations no subsurface investigation was carried out specifically for the reinforced soil walls or embankments [para 3.2.[1] @163].

(ii) At MNB at Km 276+795 three boreholes were drilled but none of these boreholes fall within the stretch where collapse of the embankment has occurred [para 3.2.[1] @163].

(iii) In the design calculation of RE walls, the actual sub-surface strata were not considered [para 3.3.[2] @165]

(iv) The sight is situated in paddy fields, the designs should have foreseen long terms fluctuations of water table [@168].”

23. It is emphasised that as per Clause 4.[1] read with Clause 3.1(i) of the Terms of Reference (ToR) of the Consultancy Contract dated 28.02.2022, the petitioner was responsible for reviewing drawings submitted by the Concessionaire, including geotechnical and hydrological investigations, characteristics of materials from borrow areas and quarry sites, topographical surveys and traffic surveys.

24. Further, Clause 5 read with Clause 3.1(ii) and Clause 6.[3] mandated the petitioner to inspect the construction work and review the quality of work. It is submitted thar under Clause 1.[2] of the General Conditions of Contract, the petitioner was fully responsible for the actions of its personnel.

25. It is submitted that the show cause notice dated 05.06.2025 cited the Expert Committee’s findings and gave the petitioner a fair opportunity to explain why suspension should not be imposed.

26. It is submitted that the Impugned Order dated 17.06.2025 was passed after considering the petitioner’s replies and hearing. The order notes that the petitioner had already admitted in its reply dated 23.05.2025 that the incident involved deficiencies on the part of both the Concessionaire and the petitioner’s key personnel. It is submitted that the petitioner, as per Clause 1.[2] of the General Conditions of Contract, is solely responsible for the conduct of its personnel.

27. Attention has been drawn to the fact that the Impugned Order also notes that Prof. D.N. Arnepalli and Prof. M.R. Madhav did not exonerate the petitioner.

28. It is further submitted that the Design Consultant submitted its reply dated 10.06.2025, which was forwarded to the Expert Committee. It is submitted that the expert committee in its final report dated 03.07.2025 concluded that there were deficiencies in geotechnical investigations. Emphasis is placed on the following observation of the Expert Committee- “2.[1] Different factors appear to have contributed to the present instance of failure of the wall/embankment including lack of critical review and scrutiny of the designs during the design approval stage, absence of proof checking by a competent expert, possibility of the ground improvement executed at the site being less than adequate because of the inherent variability of the soil strata.”

29. Further, reliance has been placed on an office memorandum dated 02.11.2021, issued by the Department of the Expenditure Ministry of Finance Procurement Policy Division.

30. It is submitted that the one-month suspension is consistent with prevailing norms. The Ministry of Finance Notification dated 02.11.2021 provides that no contract shall be awarded to a debarred entity. Suspension, in such a context, is a temporary and precautionary measure during the pendency of investigation, not a permanent blacklisting.

31. Finally, it is submitted that the scope of judicial review in matter of suspension is very limited.

32. Both parties have been heard on interim application.

33. At this stage, it is apposite to once again refer to the relevant policy provisions governing the issue under consideration.

34. Paragraph 5 of the circular dated 07.10.2021 issued by respondent no. 2 is reproduced as under– “5. Before deciding a AE/IE/CSC/PMC as Non-Performer or debarring/penalizing it, the concerned authority shall issue a notice to the AE/IE/CSC/PMC by giving 15 days time to furnish its written reply and allow personal hearing if so desired by the AE/IE/CSC/PMC before the competent authority or any person designated for the purpose. Such a notice shall not be issued without the approval of an officer not below the rank of Chief Engineer/CGM/ED. In case of projects where public safety is endangered by the behavior/conduct/action of the consultant the authority may temporarily suspend the consultant from participating in ongoing/ future bidding upto 1 month period during which the regular process of debarment shall be concluded.”

35. Similarly, paragraph 7 of the circular dated 18.01.2022 issued by respondent no. 1 reads as under-

36. These provisions lay down the mandatory requirement of issuing a show cause notice and granting a personal hearing before declaring any Authority’s Engineer (AE)/Independent Engineer (IE)/ Construction Supervision Consultant (CSC)/ Project Management Consultant (PMC) as a “Non-Performer” or initiating any penal or debarment action. Importantly, they also empower the authority to temporarily suspend consultants from participation in ongoing or future bidding processes where the conduct, behaviour, or action of the consultant poses a risk to public safety. This temporary suspension is intended to operate until the regular process of debarment is concluded.

37. In challenging the order of suspension, including its effect on ongoing bids, the petitioner has placed reliance on paragraph 9 of the circular dated 07.10.2021 issued by respondent no. 2, which is reproduced below: “Upon declaration of non-performer, the AE/IE/CSC/PMC will not be able to participate in any bid for National Highways projects with MoRTH or any other executing agencies till such time the debarment persists or the AE/IE/CSC/PMC is removed from the list of nonperformers. The AE/IE/CSC/PMC shall include its JV partners, promoters etc. whose credentials were considered while qualifying them for the project.

38. It is the petitioner’s case that eligibility to participate in a bid is determined solely on the status of the bidder as on the bid due date. Consequently, the petitioner contends that any suspension cannot affect participation in ongoing bids. Non-performer/debarment status of a bidder on the bid due date will be the criteria for eligibility of a bidder to participate in the said bid.”

39. This Court is not inclined to accept the said submission. If the petitioner’s interpretation were to be accepted, there would have been no need to specifically provide, as has been done in paragraphs 5 of the circular dated 07.10.2021 and para 7 of the circular dated 18.01.2022, that temporary suspension may be imposed with respect to ongoing and future bids.

40. Further, it is noted that the circular dated 18.01.2022 issued by respondent no. 1 does not contain any clause pari material to paragraph 9 of the circular dated 07.10.2021 issued by the respondent no. 2. Also, there appears to be cogent rationale in the proscription/consequence of suspension (as contended by the respondent), in a situation where the suspension is found to be warranted.

41. The second contention raised by the petitioner is that the impugned order of suspension deserves to be set aside on the ground that it has been passed solely on the basis of the preliminary

42. The Standard Operating Procedure (SOP) issued by the National Highways Authority of India (NHAI) vide circular dated 28.08.2020 prescribes the procedure to be followed in the event of failure of structural components on national highways. The relevant SOP is reproduced below – report of the Expert Committee (which is inherently tentative), without awaiting the final report.

43. As per Clause 4(vi) of the SOP, the Expert Committee is mandated to submit its preliminary report within 3 days and the final report within 7 days to the concerned Member.

44. Clause 4(vii) of the said SOP stipulates that deterrent action may be taken by the Authority only after examining the report of the Expert Committee.

45. Further, in terms of Clause 4(vi) and 4(vii) of the SOP dated 28.08.2020, when read with Paragraphs 5 and 7 of the subsequent circulars dated 07.10.2021 and 18.01.2022, the Expert Committee’s report is to be examined before initiating any deterrent action. Moreover, a show cause notice must be issued, providing the affected party with 15 days to submit a response.

46. A conjoint reading of the aforementioned provisions makes it evident that the issuance of a show cause notice must be preceded by the submission of the preliminary report of the Expert Committee. The said preliminary report forms the material basis for issuing a show cause notice and granting the affected party (the petitioner herein) an opportunity to respond. The final report of the Expert Committee is to be prepared in the meantime. Only thereafter, upon consideration of the petitioner’s reply to the show cause notice, and after taking into the submissions made during the personal hearing, as also the final report of the Expert Committee, can the Authority pass a final order.

47. In the present case, however, the petitioner received a show cause notice dated 22.05.2025 even before any report of the Expert Committee had been submitted. It was only after the petitioner challenged the said show cause notice in W.P.(C) No. 7494/2025 before this Court, and pursuant to the interim order dated 27.05.2025 staying paragraph 4 of the said notice, that the preliminary report of the Expert Committee was eventually submitted.

48. Based on the Court’s order and the preliminary report of the Expert Committee, a letter dated 05.06.2025 was issued to the petitioner, inviting them for a personal hearing concerning the proposed action of temporary suspension.

49. However, even before the final report of the Expert Committee was submitted, an order of suspension was passed against the petitioner.

50. Clause 4(vii) of the aforesaid SOP categorically contemplates that the Authority must examine the Expert Committee’s report before passing any “A precise identification of the causes of the failure and the various factors which led to the failure, is possible only after a comprehensive investigation comprising a detailed examination of relevant factors including a reliable assessment of foundation strata through a wellplanned and executed geotechnical investigation programme, verification of the details of any ground improvement actually carried out at the site, sampling and testing of the fill materials, validation of the design parameters considered for the geogrids, a detailed review of the construction schedule and quality checks carried out during construction and stability and settlement analysis based on reliable geotechnical data.” deterrent action. In the present case, it is not disputed that the suspension of the petitioner is based on a preliminary assessment. There is a possibility that the final determination of the Expert Committee may be at variance with its preliminary report. The preliminary report itself acknowledges as under:

51. Given the aforesaid, and considering that the prejudice caused to the petitioner as a result of operation of the suspension order is irreparable, (which cannot be undone in the event of the Expert Committee revising/ modifying its view while rendering its final report), this Court finds it apposite to stay the operation of the impugned suspension order. It is directed accordingly. The same shall, however, be subject to the outcome of the final report of the Expert Committee, and the final adjudication of the show cause notice dated 22.05.2025. The respondent is directed to expedite the adjudication thereof.

52. The application is disposed of in the above terms.

53. List on 10.09.2025.

SACHIN DATTA, J JULY 7, 2025