Pune Court Dismisses Contractor’s Plea Against Defence Ministry in NDA Project Dispute
Pune, 18th October 2025: The Pune District Court has dismissed an application filed by M/s Hariom Projects Pvt. Ltd. against the Union of India and the Ministry of Defence in connection with a contractual dispute over the construction of administrative and training infrastructure (Phase I) at the National Defence Academy (NDA), Khadakwasla.
The application, filed under Section 9 of the Arbitration and Conciliation Act, 1996, sought an injunction restraining the Defence Ministry from cancelling or terminating the construction contract and from invoking bank guarantees furnished by the contractor. The company also sought orders to stop recoveries made under a revised labour escalation formula and to direct the authorities to release pending payments.
District Judge K.P. Kshirsagar of the Pune Civil Court (District Judge–20) rejected the plea, ruling that the applicant had failed to establish a prima facie case or demonstrate that irreparable harm would be caused if interim relief was denied. The court also noted that the matter pertained to a public utility project involving public funds, where delays could adversely affect larger public interests.
Dispute Over Labour Escalation Formula
The dispute arose after the Defence Ministry issued a letter on July 11, 2025, citing a typographical error in the labour escalation formula under the contract’s special conditions clause. The ministry claimed that due to the error, the contractor was receiving payments seven times higher than the agreed amount. Consequently, a unilateral amendment was proposed and a recovery demand of ₹1.46 crore was issued.
Hariom Projects Pvt. Ltd. argued that the ministry’s action amounted to an illegal unilateral modification of contract terms and that the alleged typographical error was non-existent. The firm maintained that the issue should have been referred to the Dispute Resolution Board (DRB) and then to arbitration, as per the contract.
Adv. Krishna Ratnaparkhi, senior panel counsel for UOI, appeared for the Ministry of Defence, represented by the Garrison Engineer, NDA PROJECT, Khadakwasla.
Court’s Observations
The court observed that the contractor had not taken timely steps to initiate arbitration proceedings despite issuing a notice on May 6, 2025. “After issuance of notice of arbitration, the applicant did not approach the court for the appointment of an arbitrator, and till date, arbitration proceedings have not commenced,” the judge noted.
The order further stated that the reliefs sought under Section 9 did not qualify as urgent interim measures and that the applicant could pursue remedies through arbitration or the DRB. The court emphasized that corrections of typographical errors did not amount to contractual modifications and that disputes of this nature should be decided by an arbitral tribunal after examining evidence.
Finding that no urgency or irreparable loss was demonstrated, the court dismissed Civil Miscellaneous Application No. 878 of 2025 with costs.
The contract in question relates to the Provision of Administrative and Training Infrastructure (Phase I) at NDA, Khadakwasla, under Contract No. CEPZ/PNA/17 of 2023–24, awarded by the Ministry of Defence on February 20, 2024.
