‘Running on gensets for 2 years': Mohali bus terminal developer hits out at GMADA

Indian Express

4 days ago

Mahakram Developers told the Punjab and Haryana High Court on Monday that the Mohali Bus Terminal-cum-Commercial Complex has been forced to run on diesel generators for two years because the Greater Mohali Area Development Authority (GMADA) wrote to the state power utility blocking an electricity connection, citing a pending appeal against the project's resolution plan.
'There is no stay in their favour. If we default, the concession agreement provides for termination—why stop us from even starting?' Mahakram's counsel Amit Jhanji submitted, seeking a direction to GMADA and Punjab State Power Corporation Limited (PSPCL) to restore supply and let the project operate.
GMADA, for its part, has pressed the High Court for urgent intervention against what it calls a 'dangerous dilution' of safeguards meant to protect public safety in large infrastructure projects. Its writ petition under Articles 226 and 227 of the Constitution challenges the application of the Insolvency and Bankruptcy Code (IBC), 2016, to the public-private partnership it originally awarded in 2009, arguing that the IBC framework allows new developers to take over without meeting the stringent technical norms embedded in the concession agreement.
The authority wants the High Court to set aside the National Company Law Tribunal's (NCLT) October 2023 approval of Mahakram's plan and remand the case for a technical re-evaluation of bidders, insisting that the IBC's financial creditor–centric process sidelined GMADA's statutory mandate and allowed entities 'disqualified at the tender stage' to control a critical public asset.
The integrated bus terminal and commercial hub was awarded to C&C Towers Limited through a two-stage tender requiring bidders to have executed similar ₹50 crore projects. C&C defaulted on milestones, and GMADA moved to terminate the contract. However, insolvency proceedings admitted by the NCLT in September 2019 triggered a moratorium under the IBC, halting GMADA's action. Classified merely as an 'operational creditor,' the statutory authority lost its vote in the Committee of Creditors (CoC) despite owning the land.
In January 2020, the Resolution Professional issued an Expression of Interest cutting the net worth requirement for resolution applicants to ₹25 crore and dropping sector-specific experience altogether. Mahakram Developers' plan was later cleared by the CoC and approved by the NCLT in 2023, prompting GMADA's challenge.
Appearing before Chief Justice Sheel Nagu, Mahakram's counsel stressed that all obligations and penalties are contained in the concession agreement. 'If we fail, terminate our concession—but don't paralyse the project. For two years, the bus stand has run on generators, imposing unnecessary costs,' he said.
GMADA countered that its NCLAT appeal against the NCLT approval was pending and sought liberty to raise fresh statutory and constitutional grounds, including alleged conflicts between the IBC's overriding effect and the Punjab Regional and Town Planning and Development Act, 1995.
The bench questioned GMADA's justification for blocking operations without an interim stay. 'Your objections to the resolution plan were dismissed in 2023. Grounds not raised earlier may now be barred by res judicata,' the Chief Justice noted, referring to Section 11 of the Code of Civil Procedure.
Expressing dissatisfaction with arguments from both sides, the court said the factual record needed clarity. It directed the Insolvency and Bankruptcy Board of India (IBBI) to respond and posted the case for detailed hearing alongside a related PIL highlighting the deteriorating condition of the terminal and the approach roads.
GMADA maintains that the IBC, in its current form, subverts statutory safeguards for public infrastructure by letting financial creditors select resolution applicants solely on financial metrics. It has asked the High Court to remand the case for a technical re-evaluation, restore its statutory role in setting qualification standards, and declare that such projects cannot bypass original eligibility norms.