Thursday, June 11, 2026
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2026High CourtJune 2026LatestLegal

Enforcement of Audit Objections for Revocation & Recovery of Compensation

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IRB – plaintiff was granted sole right to demand, collect and appropriate fee on Mumbai Pune Expressway till 30.3.2030, as per the agreement dated 20.2.2020

IRB had deposited the fees of Rs.8,262 crores (including upfront and deferred sub-concessionaire fees.

Due to COVID-19 the plaintiff invoked non-political force majeure.  The parties agreed to compensate the loss as per the defendant’s offer as per the written concluded agreement.

IRB filed the commercial suit for declaration that the agreement is valid, subsisting and enforceable.  In the said suit, it has filed an interim injunction application for recovery of Rs.109 crores either by encashing bank guarantees or otherwise.

Firstly, whether the defendant granted compensation to the plaintiff as recorded and agreed in writing between the parties in lieu of the loss of toll collection for 25 days during forced lockdown. Secondly, whether the defendant is entitled to reverse or revoke, grant of the said compensation on the ground of the recommendation and opinion of the Accountant General and thirdly, whether the defendant can recover the amount with interest on the ground of such revocation, by either invoking the performance bank guarantee or otherwise.

Judgment dated 8.6.2026 of the High Court of Bombay (OS) in Interim Application No.288 of 2026 in Commercial Suit No.138 of 2025 of IRB MP Expressway Private Limited vs.  Mumbai Pune Expressway Limited.

A concluded and acted-upon contractual adjustment of compensation for loss in toll collection due to Covid-19 cannot be re-opened, revoked and recovered merely on a later audit objection.

Enforcement of Audit Objections for Revocation & Recovery of Compensation already granted for the loss in toll collection.  Such objections are internal and not conclusive.

Bombay HC Upholds Covid-19 compensation and restrains Rs.110 crores recovery by invoking doctrine of irretrievable injustice.

Bombay HC Grants inunction recovery of compensation already granted for loss of toll collection – HELD audit objections are non-determinative.

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