Special provision for contracts relating to infrastructure projects

In one minute

A single injunction can stall a road, a power plant or a metro line for years, over a private dispute between a contractor and a public body. The Specific Relief (Amendment) Act, 2018 built a small code to prevent this. It bars injunctions that would delay an infrastructure project, creates Special Courts, and sets a time limit for suits.

The code is in sections 20A, 20B, 20C and 41(ha), with a Schedule that lists the projects covered. In exams, you must state each section, name the five categories in the Schedule and explain why the bar is limited to injunctions.

Legal provision

• Section 20A(1): no court shall grant an injunction in a suit under the Act involving a contract relating to an infrastructure project specified in the Schedule. The bar applies where the injunction would cause impediment or delay in the progress or completion of the project.
• Explanation to section 20A: for sections 20A, 20B and 41(ha), "infrastructure project" means the category of projects and infrastructure sub-sectors specified in the Schedule.
• Section 20A(2) and (3): the Central Government may amend the Schedule by notification. Every notification is laid before each House of Parliament for 30 days, and Parliament may modify it or annul it.
• 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 about infrastructure contracts.
• Section 20C: such a suit shall be disposed of within 12 months from the date of service of summons on the defendant. The period may be extended by not more than six months in aggregate, after recording reasons in writing.
• Section 41(ha): 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 the relevant facility or services that are the subject matter of the project.

Meaning and definition

An infrastructure project, for this purpose, is a project listed in the Schedule. The Schedule has five categories and each has sub-sectors. The tree shows the categories.

• Schedule to the Specific Relief Act sections 20A and 41(ha)
  • 1. TransportRoads and bridges, ports, shipyards, inland waterways, airports, railways, urban public transport.
  • 2. EnergyElectricity generation, transmission and distribution; oil and gas pipelines; storage facilities.
  • 3. Water and sanitationSolid waste management, water supply and treatment, sewage, irrigation, storm water drainage.
  • 4. CommunicationTelecommunication networks, towers and services.
  • 5. Social and commercial infrastructureEducation institutions, sports infrastructure, hospitals, tourism infrastructure, industrial parks, cold storage and cold chain, terminal markets, affordable housing.

Detailed explanation

1. The problem the sections solve

Before 2018, a party to an infrastructure contract could often get an ordinary injunction that froze the work while the dispute dragged on. The public paid, with a half-built flyover or a stalled power line. Parliament decided that the law should protect projects that serve the public without ending the parties' right to settle their money dispute.

2. Section 20A: no injunction that impedes or delays

The bar is on injunctions only. It applies when two things are present: the contract relates to a project in the Schedule, and the injunction would cause impediment or delay in the progress or completion of the project. Once both are present, the court cannot grant the injunction, however strong the underlying claim may be.

3. Section 41(ha): the same bar inside the list of refusals

Section 41(ha) puts the same idea into the general list of cases where an injunction is refused. It adds one point. It also covers interference with the continued provision of the facility or services. So an operating water-treatment plant cannot be shut down by injunction.

4. Changing the Schedule

The Central Government may add to or change the categories and sub-sectors by notification, when it considers it necessary or expedient. Parliament supervises this. The notification is laid before each House for 30 days. If both Houses agree to modify or annul it, it takes effect only as modified or not at all. Anything already done under it stays valid.

5. Section 20B: Special Courts

The State Government designates, in consultation with the Chief Justice of the High Court, one or more Civil Courts as Special Courts within local limits. These courts try suits under the Act about infrastructure contracts. The idea is expertise and speed.

6. Section 20C: a time limit

The suit shall be disposed of within 12 months from the date of service of summons on the defendant. The court may extend this by no more than six months in all, and only after recording its reasons in writing. This applies notwithstanding the Code of Civil Procedure.

7. How the courts have applied the bar

In Roadway Solutions India Infra Ltd. v. National Highways Authority of India (2023), a contractor on a highway job failed to meet progress targets. The authority gave notice of intention to terminate. The contractor went to the Delhi High Court under section 9 of the Arbitration and Conciliation Act, 1996 to stop the termination and the re-tendering of the work. The Court refused. It held that, in view of sections 20A and 41(ha), courts should grant no injunction where it may delay an infrastructure project, and it said courts should interfere to the minimum extent.

8. What the bar does not take away

The parties can still claim damages, invoke arbitration if the contract has a clause, and enforce other terms. The bar stops the project from being frozen while these claims are decided.

Sections 20A, 20B, 20C and 41(ha) at a glance

Section	What it does	Key words
20A	Bars an injunction in a suit under the Act about a Schedule project	"impediment or delay in the progress or completion"
20B	Special Courts designated by the State Government	Consultation with the Chief Justice of the High Court
20C	Time limit for the suit	12 months from service of summons; up to six more months for recorded reasons
41(ha)	Adds the same bar to the list of refusals	"continued provision of relevant facility ... or services"
Schedule	Lists categories and sub-sectors	Transport, Energy, Water and Sanitation, Communication, Social and Commercial Infrastructure

Don't confuse: section 20A and section 41(ha)

Students often treat the two as the same. They overlap but differ in place and reach.

Point	Section 20A	Section 41(ha)
Place	In Chapter II, on specific performance of contracts	In section 41, the list of refusals of injunctions
Scope	Suits about a contract relating to a Schedule project	Any injunction that would impede or delay a project, or interfere with the facility or services
Extra point	Gives power to amend the Schedule and links with 20B and 20C	Protects an operating facility, not only building work

Common mistakes

• Writing that the sections bar all suits. They bar only injunctions that impede or delay a Schedule project.
• Forgetting that the bar is not discretionary. If the conditions are met, the court cannot grant the injunction.
• Forgetting the Special Courts and the 12-month limit.
• Listing the Schedule categories wrongly. There are five.
• Saying that the claim itself is lost. Damages, arbitration and other claims remain.

Apply it

Leading case laws

• Roadway Solutions India Infra Ltd. v. National Highways Authority of India (2023)

  Facts. A contractor on a highway strengthening project failed to meet progress targets. The authority gave notice of intention to terminate, and the contractor asked the Delhi High Court under section 9 of the Arbitration Act to stop the termination. Delhi High Court, Chandra Dhari Singh J., 24 May 2023. 2023 LiveLaw (Del) 442.

  Principle. The Court refused. In view of sections 20A and 41(ha), courts should grant no injunction in infrastructure projects where it may cause delay, and should interfere to the minimum extent.

  Why it matters. It applies the bar to a highway contract dispute.

• Energy Watchdog v. Central Electricity Regulatory Commission (2017)

  Facts. Generators won bids to supply electricity at fixed tariffs and asked for relief when imported coal prices rose. (2017) 14 SCC 80.

  Principle. The Supreme Court held that a rise in coal price is neither frustration nor force majeure. The case came before the 2018 Amendment and did not concern section 20A.

  Why it matters. Electricity generation is in the Energy category of the Schedule. The case shows the kind of dispute over an infrastructure contract that the 2018 scheme is meant to keep from stopping the project.

• Nabha Power Ltd. v. Punjab State Power Corporation Ltd. (2017)

  Facts. Under a 25-year power purchase agreement, the buyer deducted coal washing and transport costs from the generator's bills. (2018) 11 SCC 508.

  Principle. The Supreme Court decided the dispute by interpreting the contract's energy charge formula. It added no implied term. This case also came before the 2018 Amendment and did not concern section 20A.

  Why it matters. It shows how a major power contract dispute is settled on the contract's terms while the project continues.

How to write this answer in the exam

Key points to remember

• Section 20A: no injunction that would impede or delay a Schedule infrastructure project.
• Schedule: five categories. The Central Government may amend it; Parliament supervises.
• Section 41(ha): the same bar in the list of refusals, plus protection of the facility or services.
• Section 20B: Special Courts. Section 20C: 12 months, extendable by up to six months.
• Only injunctions are barred. Damages, arbitration and other claims remain.

Quick self-test

Related topics

• Injunctions-Generally
• Arbitration clause
• Construction contracts
• Specific Relief Act including 2018 Amendment