1. The challenge in this petition by Prakash Atlanta JV (PAJV) and its group companies is to the validity of a show cause notice dated 27th June 2008 and the consequent decision communicated by a letter dated 24th February 2009 issued by Respondent No. 1 the National Highways Authority of India („NHAI?) barring the Petitioners from “short-listing, participating or bidding for any future projects to be undertaken by the NHAI”, either directly or indirectly for a period of two years.

2. The work of construction of “Segment of the Lucknow Bypass” connecting National Highway („NH?) No. 25 and NH No. 28 via NH 56 passing through Lucknow city in the State of Uttar Pradesh (known as Package No. E.W.-15/UP) was awarded to the Petitioners by the NHAI. On 10th August 2001 an agreement was entered into between the parties. The length of the road to be constructed was 22.66 Km and included construction of road works and bridges in accordance with drawings and the provisions of the contract. The value of the project was Rs.158,80,42,423/- and the start date of the work was to be reckoned with effect from 30th August 2001. The work was to be completed on or before 29th August 2004 i.e. within a period of 36 months.

3. The case of the Petitioners is that during the course of the execution of the work they were called upon to execute a new and major structure called via-duct for a length of 1.5 Km which was not envisaged under the original scope of work. This led to procuring additional plant and machinery. The Petitioners state that on account of variations made by the NHAI and for other reasons attributable to the NHAI, the work order extended to a period of 40 months beyond the original stipulated time period. According to the Petitioners nearly 106 variation orders were issued by the NHAI till April 2008 and as many as 58 variation orders were issued beyond the original time limit. No additional time was assigned for carrying out the variation items.

4. There was a dispute between the parties as regards the rates for the work covered by the variation orders. In terms of the contract this dispute was referred to the Dispute Review Expert who on 9th July 2005 directed making all payments to the Petitioners at market rates. Twenty-seven months thereafter, on 4th October 2007 the NHAI invoked the arbitration clause. According to the Petitioners even the admitted payments amounting to Rs.1.5 crores were withheld from them and they have been further crippled by the NHAI encashing bank guarantees to the tune of Rs.28 crores. The Petitioners claim that against the tendered amount of Rs.158.80 crores, they executed work worth about Rs.170 crores excluding price variation up to 14th March 2008 and yet the project was nowhere near completion.

5. The Petitioners, in terms of Clause 59 (iv) of the agreement, issued a notice on 28th May 2004 calling upon the NHAI to make the payment as certified by the Engineer. A meeting was called pursuant to this notice but the NHAI did not fulfill the commitment made by it to release the withheld payments. On 12th June 2006 the Petitioners issued a termination notice. It is stated that they were persuaded by the NHAI to continue the work by formally extending the time. Ultimately, on 14th March 2008 the Petitioners wrote to the NHAI informing it that the contract stood terminated. The Petitioners stated therein that they have suffered huge losses on account of the omissions and commissions of the NHAI and claimed Rs.84,51,12,743/- on various counts.

6. The Petitioners filed a statement of claims dated 28th February 2008 before the Arbitral Tribunal. Thereafter by a letter dated 27th June 2008 the NHAI asked the Petitioners to show cause why they should not be debarred from pre-qualification, participating and bidding in future events. The Petitioners received the aforementioned notice on 3rd July 2008 and sent a detailed reply dated 12th July 2008. In the reply a reference was made to