Delhi District Court
Andhara Pradesh vs National Highways Authority Of India on 20 May, 2019
IN THE COURT OF SH HARGURVARINDER SINGH
JAGGI ADDL. DISTRICT JUDGE-02: SOUTH-WEST
DISTRICT: DWARKA COURTS:NEW DELHI
CS NO. 788/2019
DLSW010026592019
Md. Usman
No. 29-28/1-22
Kovelamudivari Street
Suryarao Pet
Vijayawada -520002
Andhara Pradesh ... Petitioner
Versus
National Highways Authority of India
Through its Chairman
G-6 &6, Sector-10
Dwarka, New Delhi - 110075 ... Respondent
Date of institution of petition : 25.02.2019
Date of reserving judgment : 16.05.2019
Date of pronouncement of judgment : 20.05.2019
JUDGMENT
OMP (I) (COMM) No. 788/2019 Page 1 of 52
1. The present legal proceedings, entail a petition under Section 9 of the Arbitration & Conciliation Act, 1996 (hereinafter "the Act"), moved by the petitioner. The petitioner has also moved an application under Order XXXIX, Rule 2A of the Code of Civil Procedure, 1908 (hereinafter "CPC") and an application under Order XXXIX, Rule 4, CPC moved by the respondent.
2. The petitioner, namely, Md. Usman (hereinafter "petitioner") has preferred a petition under Section 9 of the Act against the respondent, namely, National Highways Authority of India (hereinafter "respondent") and has sought the following reliefs:
"a) Pass an ex-parte ad-interim order directing the Respondent to maintain status quo w.r.t. the communication dated 20.02.2019 and/or, in the alternative, in the event the Toll Plaza Agreement has already been terminated then to direct the Respondent to maintain status quo ante w.r.t. the communication dated 20.02.2019 as on 19.02.2019;
b) Pass an ex-parte ad-interim order restraining Respondent No. 1 from taking any coercive action pursuant to the communication dated 20.02.2019, including OMP (I) (COMM) No. 788/2019 Page 2 of 52 giving effect to the termination of the Toll Plaza Agreement;
c)Pass an ex-parte ad-interim order staying the termination of the Toll Plaza Agreement pending the adjudication of the abovecaptioned(sic) petition;
d) pass any other order[s] as it may deem fit in the interest of equity, fairness and good conscience."
3. The petitioner is a tollgate contractor and whereas, the respondent is an autonomous body set up under the National Highways Authority of India Act, 1948 passed by the Parliament. Section 16(1) of the NHAI Act, 1948, states that the function of NHAI is to develop, maintain and manage the national highways and any other highways vested in, or entrusted to it by the Government of India. The respondent is also responsible for the toll collection on several highways. The petitioner entered into a contract i.e. toll plaza agreement dated 02.08.2018 (hereinafter "toll plaza agreement") with the respondent for the collection of user fee at Rapur toll plaza, Andhra Pradesh at Km 433.800 for the Section from the Km 425.400 to 466.650 (Penchalkona - Yerpedu) of NH 565. As per the contract, the tenure of the appointment of the petitioner herein, as a toll contractor is w.e.f. 03.08.2018 (0800hrs) to OMP (I) (COMM) No. 788/2019 Page 3 of 52 03.08.2019 (0759hrs) and the weekly remittance for the toll plaza was a sum of ₹27,229/- (Rupees Twenty seven thousand two hundred and twenty nine only).
4. The petitioner has urged in the petition that the petitioner has been diligently collecting and making weekly remittance of toll, as per the terms and conditions of the toll plaza agreement. It is averred in the petition that the petitioner till date has remitted a sum of ₹7,88,252/- (Rupees Seven lakhs eighty eight thousand two hundred and fifty two only) to the respondent. It is also averred in the petition that there is no amount whatsoever due and payable by the petitioner to the respondent under the toll plaza agreement.
5. The petitioner in paragraph No. 5 of the petition has averred that regardless of all the remittances by the petitioner to the respondent under the toll plaza agreement, the respondent issued a notice 23.01.2019 inviting tenders for the collection of user fee at the Rapur toll plaza. The petitioner has averred that such issuance of notice by the respondent is contrary to industry practice and the same had been issued without any cause or occasion. Thereafter, the petitioner invoked the extra-ordinary jurisdiction of the Hon'ble High Court of Delhi and preferred a wit petition titled as Md. Usman v. National Highways Authority of India - W.P.(C)No. OMP (I) (COMM) No. 788/2019 Page 4 of 52 1038 of 2019. It is averred that the said petition was withdrawn by the petitioner on 01.02.2019.
6. The petitioner on 20.02.2019 received an email from the respondent, which also contained a file attachment i.e. communication dated 20.02.2019 intimating the petitioner that the respondent has terminated the toll gate agreement, as per Clause 35(2) of the said agreement. The reason for termination cited by the respondent in the said communication was non- clearing of outstanding dues and such dues exceeding the performance security deposited by the petitioner with the respondent. In short, the petitioner being a defaulter and hence the toll gate agreement was being terminated.
7. The petitioner has averred in the petition that there are no dues outstanding and thus no occasion to terminate the toll gate agreement had arisen However, the petitioner in paragraph No. 6 of the petition has averred that there are disputes between the parties in respect of 9(nine) other toll plazas and with regard to which a writ petition is pending before the Hon'ble High Court of Delhi titled as Md. Usman v. National Highways Authority of India - W.P.(C)No. 777/2019. The petitioner in the same paragraph has averred that the present toll plaza i.e. Rapur toll plaza, which is the subject matter of the petition is dispute free.
OMP (I) (COMM) No. 788/2019 Page 5 of 528. The petitioner apprehends that the respondent may prematurely terminate the toll gate agreement. The petitioner has averred in the petition that the communication dated 20.02.2019 neither provide any details of the purported outstanding dues nor the same was pre-dated by any communication claiming any default in payments on the part of the petitioner under the toll plaza agreement. The petitioner has urged that the respondent is attempting to oust the petitioner by false allegation of him being a defaulter.
9. On 23.02.2019, subsequent to the receipt of the notice dated 20.02.2019 wherein the respondent would be terminating the contract by resorting to take coercive steps, the petitioner preferred the present petition.
10. On 25.02.2019, this Court issued notice to the respondent on filing of process fee through registered post, speed post and also dasti returnable for 27.02.2019. The petitioner was also directed to file an affidavit of service.
11. As per the service report dated 25.02.2019, the service was duly effected upon the respondent at its head quarters situated in Sector 10, Dwarka, New Delhi - 110075. In spite of service, none appeared on behalf of the respondent on 27.02.2019. Sh. Angad Mehta and Ms. Bani Brar, Ld. counsels for the petitioner on 27.02.2019 in the pre-lunch session OMP (I) (COMM) No. 788/2019 Page 6 of 52 submitted and placed on record a letter dated 26.02.2019, wherein the respondent has requested one Sh. Anil Kumar Shukla to take necessary action for taking over the toll plaza, Rapur from the petitioner on 27.02.2019.
12. On 27.02.2019 and this court vide order dated 27.02.2019, as an interim measure directed the respondent to maintain status quo ante as on 25.02.2019. This Court further directed the respondent that in case, if any coercive steps have been taken against the petitioner, the same be duly rectified and status quo ante be maintained. The copy of order dated 27.02.2019 was directed to be served upon the respondent through speed post and email and was also given dasti to the petitioner for necessary compliance and necessary action. The matter was adjourned for 13.03.2019.
13. On 13.03.2019, Sh. V.P. Gaur filed appearance and vakalatnama on behalf of the respondent. Ms. Bani Brar, Ld. counsel for the petitioner submitted that regardless of the service effected upon the respondent in tandem with orders dated 25.02.2019 and 27.02.2019, the respondent has flouted the order dated 27.02.2019. Sh. Gaur, Ld. counsel for the respondent sought one week's time to seek instruction with regard to appointment of arbitrator and/or amicable resolution of dispute. The matter was adjourned for 27.03.2019.
OMP (I) (COMM) No. 788/2019 Page 7 of 5214. On 27.03.2019, the petitioner moved an application under Order XXXIX, Rule 2A of the Code of Civil Procedure, 1908 (hereinafter "CPC") on the ground that the respondent failed to comply with the order dated 27.02.2019 passed by this Court. Since none appeared for the respondent, notice was issued to the respondent returnable for 16.05.2019.
15. On 16.05.2019, a fresh vakalatnama was filed by Ms. Prerna Priyadarshini, on behalf of the respondent. Ld. counsel for the respondent submitted that the respondent not only filed reply to the petition under Section 9 of the Act, reply to the petitioner's application under Order XXXIX, Rule 2A, CPC but also the respondent has moved an application under Order XXXIX, Rule 4 CPC seeking vacation of stay order dated 27.02.2019. Ld. counsel further submitted that the above said replies and the application were filed on 15.05.2019 with an advance copy served upon the Ld. counsel for the petitioner against written acknowledgment on 13.05.2019.
16. Sh. Angad Mehta, Ld. counsel for the petitioner submitted that the petitioner does not intend to file reply to the respondent's application under Order XXXIX, Rule 4, CPC since the parties are advancing arguments on the Section 9 petition, Ld. counsel may be permitted to advance arguments OMP (I) (COMM) No. 788/2019 Page 8 of 52
17. Sh. Angad Mehta, Ld. counsel for the petitioner advanced his submissions in tandem with the averments in the petition under Section 9 of the Act. Ld. counsel for the petitioner submitted that regardless of there being no default in remittance by the petitioner qua Rapur toll plaza, the respondent was hell bent to terminate the toll plaza agreement. Ld. counsel further submitted that the petitioner by issuance of notice dated 23.01.2019 invited tender bids for the collection of use fee for the Rapur toll plaza and overtly expressed its intention to oust the petitioner and it was for this reason the petitioner invoked the jurisdiction of this Court to seek a relief under Section 9 of the Act, as the arbitration agreement was enshrined in the toll plaza agreement.
18. Sh. Angad Mehta, Ld. counsel for the petitioner further submitted that no occasion had arisen to terminate the toll plaza agreement and such act of termination by the respondent reeks of mala fide.
19. Sh. Mehta, Ld. counsel submitted that the petitioner beseech intervention of this Court by way of a petition under Section 9 of the Act, as the termination of the contract by the respondent under Clause 35(2) of the toll gate agreement is untenable and assuming for the sake of argument, a ground of termination is made out, the same would be under Clause 35(3) OMP (I) (COMM) No. 788/2019 Page 9 of 52 of the toll gate agreement and not Clause 35(2). Ld. counsel further submitted that the respondent has prematurely terminated the contract without any just cause.
20. Sh. Mehta, Ld. counsel for the petitioner further urged the ground for this Court to intervene and enjoin the respondent is that serious issues are to be adjudicated and the respondent cannot decide the same unanimously, arbitrarily and above all resort to taking coercive steps. Ld. counsel further submitted that as per the petitioner the dispute between the parties is an arbitrable dispute and squarely covered under Clause 27 of the toll gate agreement and not covered under Clause 26 of the agreement.
21. Sh. Mehta, Ld. counsel for the petitioner further submitted that the respondent's conduct is apparent nay evident from the fact that the respondent failed to appear before this Court on 27.02.2019 despite service on 25.02.2019 and above all the respondent failed to adhere to the order dated 27.02.2019, wherein this Court directed the respondent to maintain status quo ante as on 25.02.2019. Ld. counsel further submitted that by non-compliance of this Court's order dated 27.02.2019, the respondent has flouted the law and polluted the stream of justice.
OMP (I) (COMM) No. 788/2019 Page 10 of 5222. Ld. counsel for the petitioner submitted that the respondent by its recalcitrant conduct has committed contempt and the respondent cannot be heard unless the contempt is purged. Sh. Mehta, Ld. counsel for the petitioner placed reliance upon In the Matter of Anil Panjwani1
23. Ld. counsel for the petitioner further submitted that the respondent on one hand by way of email and communication dated 20.02.2019 terminated the toll plaza agreement without there being an occasion of default with regard to the Rapur toll plaza and on the other hand the respondent flouted the restraining order dated 27.02.2019 passed by this Court. Ld. counsel further submitted that the petitioner had knocked the doors of this Court on 23.02.2019, when the petition under Section 9 of the Act was moved by the petitioner and notice was duly served upon the respondent on 25.02.2019 and 26.02.2019. Yet, the respondent proceeded with the taking over the possession of the toll plaza booth from the petitioner on 27.02.2019. Ld. counsel for the petitioner further submitted that the conduct of the respondent of might is right, is evident from the fact that even after service of the order dated 27.02.2019 passed by this Court, the respondent failed to comply and restore the (status quo ante) as on 25.02.2019. Ld. counsel for the petitioner further submitted that it is for this 1 (2003) 7 SCC 375 OMP (I) (COMM) No. 788/2019 Page 11 of 52 reason the petitioner was forced to move an application under Order XXXIX, Rule 2A, CPC, seeking appropriate action for such overt and disorderly behaviour and conduct of the respondent, who being an instrumentality of the State has blatantly failed to comply and obey the orders passed by the Court of Justice.
24. Per contra, Ms. Prerna Priyadarshini flanked three- pronged attack to the petition on behalf of the respondent. Ms. Priyadarshini, Ld. counsel for the respondent submitted that the petition preferred by the petitioner is not maintainable, as the dispute between the parties is a non-arbitrable dispute and the same is beyond the realm of the arbitration agreement. Ld. counsel for the respondent submitted that the petitioner is a defaulter, who defaulted in remitting money, as per the terms and conditions of the toll gate agreement.
25. Ld. counsel further submitted that the toll plaza agreement is a determinable contract, as per the provisions of Section 14 of the Specific Relief Act, 1963 and thus its termination cannot be questioned. Ld. counsel further submitted that assuming for the sake of arguments, the dispute between the parties is an arbitrable dispute, the petitioner can be adequately compensated for such purported breach of contract by the respondent. Ld. counsel further submitted that OMP (I) (COMM) No. 788/2019 Page 12 of 52 the petitioner has already invoked the jurisdiction of the Hon'ble High Court of Delhi by preferring a petition under Section 11 of the Act, and sought appointment of an arbitrator.
26. Ms. Priyadarshini, Ld. counsel for the respondent unleashed her main wave of attack on the petition that the petitioner is not entitled to any relief, as the petitioner has knowingly suppressed material facts and documents from this Court. Ld. counsel for the respondent submitted that the petitioner has knowingly withheld the factum of issuance of show cause notice dated 02.01.2019 by the respondent to the petitioner. Ld. counsel for the respondent further submitted that the petitioner even replied to the respondent's show cause notice dated 02.01.2019 through reply dated 15.01.2019 but the petitioner in the present petition has not uttered a word with regard to the same. Ld. counsel further submitted that the show cause notice was issued to the petitioner by the respondent, wherein the respondent has sought from the petitioner payment of dues to the tune of ₹26,80,00,000/- (Rupees Twenty six crores and eighty lakhs only). Ld. counsel for the respondent submitted that the petitioner is repeated defaulter and who had been black-listed by the respondent and his name had been removed from the list of pre-qualified bidders.
OMP (I) (COMM) No. 788/2019 Page 13 of 5227. Ld. counsel for the respondent submitted that the relief sought by the petitioner under Section 9 of the Act is in the nature of a temporary injunction. Ld. counsel further submitted that injunction is a discretionary equitable relief, which has its origin in equity. Ld. counsel for the respondent submitted that with material suppression of fact and documents by the petitioner, the petitioner has no right to seek any relief be it injunction against the respondent. Thus, the present petition is liable to be dismissed.
28. With regard to the application under Order XXXIX, Rule 2A, CPC and the flouting the order dated 27.02.2019 passed by this Court, Ms. Priyadarshini, Ld. counsel submitted that the respondent have utmost regard for the law of the land and the judiciary and there has been no intentional violation of the orders. Ld. counsel submitted that the petitioner by withholding material facts and documents from this court sought the order dated 27.02.2019.
29. Ms. Priyadarshini, Ld. counsel submitted that the application moved by the petitioner under Order XXXIX, Rule 2A, CPC is an utter abuse of process of law and the same is to be dismissed. Ld. counsel further submitted that no case for breach of this Court's order dated 27.02.2019 is made out, as the respondent has submitted that there is a plausible OMP (I) (COMM) No. 788/2019 Page 14 of 52 explanation on behalf of the respondent, which being that the petitioner was already black-listed, a show cause notice and its reply thereafter had been knowingly concealed by the petitioner from this court. Ld. counsel for the respondent further submitted that the possession of the Rapur toll plaza was taken over by the respondent on 27.02.2019 at 8:00A.M. and the possession was handed over by the representative of the petitioner.
30. Ld. counsel further submitted that the petitioner assailed the order dated 27.02.2019 passed by this court, by preferring an appeal before the Hon'ble High Court of Delhi titled as National Highways Authority of India v. Md. Usman - FAO No. 172/2019. Ld. counsel submitted that the appeal was disposed off in terms of order dated 22.04.2019 and the same has been placed on record by the respondent herein along with the documents filed with the reply to the petition. Thus, the allegation by the petitioner that the respondent has breached the order of this court is a ruse.
31. Lastly, Ld. counsel for the respondent submitted that had the petitioner disclosed about the show cause notice dated 02.01.2019 issued by the respondent to the petitioner and the petitioner's reply dated 15.01.2019 to the show cause notice, this Court would not have passed the order dated 27.02.2019.
OMP (I) (COMM) No. 788/2019 Page 15 of 52Ld. counsel for the respondent submitted that the petitioner sought the order dated 27.02.2019 by suppression of fact, concealment of documents and misleading this Court.
32. Ms. Prerna Priyadarshini, Ld. counsel for the respondent placed reliance upon Progressive Constructions Ltd. v. Chairman, National Highways Authority of India & Ors., 2 Dorab Cawasji Warden v. Coomi Sorab Warden and Others, 3 Seema Arshad Zaheer and Others v. Municipal Corpn. of Greater Mumbai & Others,4 Surender Kumar Singhal v. Municipal Corporation of Delhi,5 Adhunik Steels Ltd. v. Orissa Manganese and Minerals (P) Ltd.6 and Indian Oil Corporation Ltd. v. Amritsar Gas Service & Ors7.
33. Ld. counsel for the respondent cited Progressive Constructions Ltd. v. Chairman, National Highways Authority of India & Ors.,8 in support of her submissions that this Court under Section 9 of the Act cannot pass a direction to a party of not terminating the contract or to continue with the contract. Ld. counsel further submitted even if the contract is terminated rightly or wrongly, the petitioner would always have rights to seek recourse in accordance with law. Ld. counsel 2 (2009) 157 DLT 537 3 (1990) 2 SCC 117 4 (2006) 5 SCC 282 5 2003 (66) DRJ 518 6 (2007) 7 SCC 125 7 (1991) 1 SCC 533 8 (2009) 157 DLT 537 OMP (I) (COMM) No. 788/2019 Page 16 of 52 further submitted that it is the right of the party not to continue with a contract and the Court cannot force a contract on somebody under Section 9 of the Act.
34. Ld. counsel for the respondent placed reliance upon Indian Oil Corporation Ltd. v. Amritsar Gas Service & Ors. (1991) 1 SCC 533 on the proposition that the relief of restoration of the contract would be contrary to law and in direct contravention of Section 14 and 16 of the Specific Relief Act, 1963. Ld. counsel submitted that the respondent had rightly revoked the contract and in case the petitioner is aggrieved by such revocation, the petitioner may seek damages for breach of contract but not restoration of the contract.
35. Ms. Priyadarshni, Ld. counsel for the respondent placed heavy reliance upon Dorab Cawasji Warden v. Coomi Sorab Warden and Others,9 to buttress her submissions that the relief sought by the petitioner under Section 9 of the Act is an interlocutory mandatory injunction, which being an equitable relief and thus the petitioner has to show that a prima facie case exists in his favour, irreparable loss and injury would be caused to the petitioner and a loss, which cannot be compensated in terms of money and lastly, the balance of convenience shall also lie in favour of the petitioner. Ld. counsel further cited Seema Arshad Zaheer and Others v. Municipal Corpn. of 9 (1990) 2 SCC 117 OMP (I) (COMM) No. 788/2019 Page 17 of 52 Greater Mumbai & Others,10 and submitted that grant of a temporary injunction is a discretionary relief and a party who seeks relief must at first place show that a prima facie case exists in his favour and against the opposite party.
36. Ld. counsel in the strongest voice submitted that no relief ought to be granted to the petitioner, as the petitioner has approached this Court with unclean hands and suppressed material facts and documents. Ld. counsel placed reliance upon Surender Kumar Singhal v. Municipal Corporation of Delhi,11 and submitted that the order dated 27.02.2019 passed by this Court must be vacated and the petition be dismissed.
37. Adhunik Steels Ltd. v. Orissa Manganese and Minerals (P) Ltd.,12 the swansong judgment on which Ld. counsel for the respondent placed heavy reliance. Ld. counsel submitted that Adhunik Steels Ltd. v. Orissa Manganese and Minerals (P) Ltd.13 culls out the legal principle and role of Courts in arbitration process, particularly Section 9 of the Act. Ld. counsel once again submitted that no injunction can be granted against the respondent for continuance of the contract and the contract between the parties was not specifically enforceable, 10 (2006) 5 SCC 282 11 2003 (66) DRJ 518 12 (2007) 7 SCC 125 13 ibid.
OMP (I) (COMM) No. 788/2019 Page 18 of 52as it was terminable and regardless, the petitioner can be compensated in terms of money, in accordance with law.
38. Sh. Angad Mehta, Ld. counsel for the petitioner rejoined his submissions. Ld. counsel submitted that neither the show cause notice dated 02.01.2019 nor petitioner's reply dated 15.01.2019 to the said show cause notice pertain to the subject matter before this Court i.e. Rapur toll plaza and the same is irrelevant and has no bearing upon the present case.
39. Ld. counsel for the petitioner further submitted that the reliance placed by the respondent upon the judgment of Progressive Construction is a bogey. Ld. counsel further submitted that the present petition is a petition under Section 9 of the Act and thus the respondent may not be permitted to undertake a mini trial by advancing submissions on the merits of the case.
40. Ld. counsel further submitted that the respondent has till date failed to comply with the order dated 27.02.2019 passed by this court and thus, this court shall take appropriate steps against such contumacious conduct of the respondent, who has no regard for the rule of law.
41. Sh. Mehta, Ld. counsel for the petitioner concluded his submissions by stating that on one hand the respondent have ousted the petitioner from the Rapur toll plaza by illegally OMP (I) (COMM) No. 788/2019 Page 19 of 52 terminating the toll plaza agreement and on the other hand, the respondent have failed to appoint an arbitrator for resolution of dispute, as per the arbitration agreement between the parties.
42. I have heard the submissions of the Ld. counsels for the parties and carefully perused the judicial file. I, deem it appropriate to reproduce the arbitration agreement inter alia other relevant clauses from the toll plaza agreement.
43. The arbitration agreement enshrined in Clause 27 of the toll plaza agreement along with Clause Nos. 26, 29 and 35, are reproduced for ready reference, which reads as under:
"27. ARBITRATION:
(a) All disputes and/or difference except those which are mentioned in the matters nonarbitral under Clause 26 above arising between the parties out of this Contract shall be settled by Arbitration under and in accordance with the provisions of the Arbitration and Conciliation Act, 1996. The Chairman of the Authority or his nominee shall be the sole Arbitrator. The award made and published in pursuance of such Arbitration proceedings shall be final and binding on both the parties.
(b) The proceedings of the Arbitration shall be held in English language and shall be held at such place as may be decided by the Chairman of the Authority or his nominee.OMP (I) (COMM) No. 788/2019 Page 20 of 52
The award of the Arbitration shall be final and binding on both the parties to the Contract
(c) Pending resolution of any dispute pursuant to Arbitration, under all circumstances the Contractor shall continue to remit the agreed installments of money to the Authority as prescribed in this Contract including when the dispute is about the amount to be remitted.
(d) The contract agreement shall be governed by and construed in accordance with the laws of India and the Courts at New Delhi shall have the exclusive jurisdiction over all disputes arising under, pursuant to and/or in connection with the contract agreement."
"26. MATTERS NONARBITRABLE:
Any disputes or differences between the parties in regard to the matter covered under Clauses 3, 7, 8, 10, 14, 18 and 19 shall be referred to the Authority, Project implementation Unit/Corridor Management Unit Tirupati whose decision shall be final."
"29. BREACH:
Any breach of the terms and conditions herein contained in this Contract, which OMP (I) (COMM) No. 788/2019 Page 21 of 52 may or may not, cause any financial loss to the Authority shall attract immediate unilateral termination of this Contract by the Authority, not withstanding anything contrary contained in any of the Clauses in this Contract."
"35. TERMINATION:
(1) The authority shall be entitled to terminate this Contract once the decision is taken to transfer the road section to BOT/OMT concessionaire (reference clause 2 of the contract) at any time after giving notice tot he Contractor as under in writing and in that event, the Contractor shall not be entitled to any claim, or any compensation whatsoever on account of such termination.
(2) The Authority shall be entitled to terminate this Contract at any time without assigning any reason(s) after giving notice to the Contractor as under in writing and in that event, the Contractor shall not be entitled to any claim, or any compensation whatsoever on account of such termination.
By giving seven (7) days prior notice in writing.
(3) Notwithstanding anything contained in clause (1) above, the Authority may OMP (I) (COMM) No. 788/2019 Page 22 of 52 terminate the Contract forthwith for breach or nonobservance of any of the terms and conditions of this Contract or for any misconduct on the part of Contractor or his employee/staff/personnel or for overcharging of User Fee from a user, or for harassment of any user (4) The Authority shall be entitled to terminate this Contract for any type of nonecompliances under provisions of this contract if not rectified within a given time frame.
(5) Premature termination of the contract at the request of the Contractor:
Within 30 days of taking over the toll plaza, if the Contractor feels that he has committed an error in assessing the realizable user fee at the toll plaza, he may in writing request the Authority for pre mature termination of the contract. Such request of the Contractor is irreversible by the Contractor under any circumstances.
The Contractor, even after making such request, shall continue to collect user fee at the toll plaza, emit the agreed remittances timely to the Authority nd comply with all other terms and conditions in ccordance with this contract, till handing over of he toll plaza tot he new agency.OMP (I) (COMM) No. 788/2019 Page 23 of 52
The Authority shall appropriate 25% of the performance security as mutually agreed genuine perestimated compensation and damages payable to the Authority for inter alia time, cost and effort of the Authority. The balance performance security shall be released by the Authority within 30 days of handing over of the toll plaza to the new agency.
Within 60 days of receipt of such request, the Authority may complete the bidding process for selection of new agency; select the new agency and handover the toll plaza to the new agency. For avoidance of doubt, NHAI would finalize the new agency as early as possible, irrespective of the quotes of the Contractor and the new agency. This Agreement stands terminated automatically on the date of handing over of the toll plaza to the new agency. The existing Contractor is also eligible to bid at the time of selection of new agency by NHAI, but if he does not takeover or leaves in between or abandons the user fee collection work second time, he will be debarred from participating in further bidding for user fee collection at the same Toll Plaza, either directly in his own name or as a consortium or as an associate or in the name of any firm owned by him, for a period of two years.OMP (I) (COMM) No. 788/2019 Page 24 of 52
This clause is nonarbitrable as per Clause 26 of Agreement."
44. The Apex Court in Adhunik Steels Ltd. v. Orissa Manganese and Minerals (P) Ltd.,14 has culled out the legal principle with regard to grant of an injunction under Section 9 of the Act, which reads, as under:
"16. Injunction is a form of specific relief. It is an order of a Court requiring a party either to do a specific act or acts or to refrain from doing a specific act or acts either for a limited period or without limit of time. In relation to a breach of contract, the proper remedy against a defendant who acts in breach of his obligations under a contract, is either damages or specific relief. The two principal varieties of specific relief are, decree of specific performance and the injunction. The Specific Relief Act, 1963 was intended to be "an Act to define and amend the law relating to certain kinds of specific reliefs". Specific relief is relief in specie. It is a remedy which aims at the exact fulfilment of an obligation. According to Dr. Banerjee in his Tagore Law Lectures on Specific Relief, the remedy for the non- performance of a duty (1) compensatory, (2) specific. In the former, the court awards damages for breach of the obligation. In latter, it directs the party in default to do or forbear from doing the very thing, which he 14 (2007) 7 SCC 125 OMP (I) (COMM) No. 788/2019 Page 25 of 52 is bound to do or forbear from doing. The law of specific relief is said to be, in its essence, a part of the law of procedure, for, specific relief is a form of judicial redress.
Thus, the Specific Relief Act, 1963 purports to define and amend the law relating to certain kinds of specific reliefs obtainable in civil courts. It does not deal with the remedies connected with compensatory reliefs except as incidental and to a limited extent. The right to relief of injunctions is contained in Part III of the Specific Relief Act. Section 36 provides that preventive relief may be granted at the discretion of the court by injunction, temporary or perpetual. Section 38 indicates when perpetual injunctions are granted and Section 39 indicates when mandatory injunctions are granted. Section 40 provides that damages may be awarded either in lieu of or in addition to injunctions Section 41 provides for contingencies when an injunction cannot be granted. Section 42 enables, notwithstanding anything contained in Section 41, particularly Clause (e) providing that no injunction can be granted to prevent the breach of a contract the performance of which would not be specifically enforced, the granting of an injunction to perform a negative covenant. Thus, the power to grant injunctions by way of specific relief is covered by the Specific Relief Act, 1963."
OMP (I) (COMM) No. 788/2019 Page 26 of 5245. Courts are empowered by the provisions enshrined in Order XXXIX, Rule 1 & 2, CPC, and Section 9 of the Act, to grant temporary injunction to the parties to the suit/proceedings. Temporary injunction is an equitable discretionary relief and with the temporary injunctions being one of the most sought and used provision by the litigants, Courts have with judicial pronouncement and experience within the parameters of Order XXXIX evolved a process of grant and refusal of a temporary injunction.
46. Three main principles govern the grant or refusal of injunction:
1. prima facie case;
2. irreparable loss / injury, and
3. balance of convenience
47. The phrases prima facie case, balance of convenience and irreparable loss are not rhetoric phrases for incantation, but words of width and elasticity, to meet myriad situations presented by man's ingenuity in given facts and circumstances, but always is hedged with sound exercise of judicial discretion to meet the ends of justice - See: Dalpat Kumar v. Prahlad Singh.15.
48. These principles have to be considered in a proper perspective in the facts and circumstances of a particular case 15 (1992) 1 SCC 719 OMP (I) (COMM) No. 788/2019 Page 27 of 52 and in case the principles have not been properly applied, the appellate court can interfere in an interlocutory proceeding under Order XXXIX, Rules 1 and 2 of CPC.
49. In the broad category of prima facie case, it is imperative for the Court to carefully analyse the pleadings and the documents on record and only on that basis the Court must be governed by the prima facie case. In a grant and refusal of injunction, pleadings and documents play a vital role.
50. Grant or refusal of an injunction in a civil trial is the most important stage in the civil trial. Due care, caution, diligence and attention must be bestowed by the Court while granting or refusing injunction. In most cases, the fate of the case is decided by grant or refusal of an injunction. Experience has shown that once an injunction is granted, getting it vacated would become a nightmare for the defendant.
51. In order to grant or refuse injunction, the Judge must carefully examine the entire pleadings and documents with utmost care and seriousness. The safe and better course is to give short notice on injunction application and pass an appropriate order after hearing both the sides. In case of grave urgency, if it becomes imperative to grant an ex-parte ad interim injunction, it should be granted for a specified period, such as, for two weeks. In those cases, the plaintiff will have no OMP (I) (COMM) No. 788/2019 Page 28 of 52 inherent interest in delaying disposal of injunction application after obtaining an ex-parte ad interim injunction.
52. The Court, in order to avoid abuse of the process of law may also record in the injunction order that if the suit is eventually dismissed, the plaintiff undertakes to pay restitution, actual or realistic costs. While passing the order, the Court must take into consideration the pragmatic realities and pass proper order for mesne profits. The Court must make serious endeavour to ensure that even-handed justice is given to both the parties - See: Maria Margarida Sequeira Fernandes v. Erasmo Jack De Sequeira (Dead) Thru Lrs.16
53. In Morgan Stanley Mutual Fund v. Kartick Das, 17 the Apex Court held that ex parte ad-interim injunction could be granted only under exceptional circumstances. The factors which should weigh for grant of injunction are --
1. whether irreparable loss or injury or serious mischief will ensue to the plaintiff;
2. whether the refusal of ex-parte injunction would involve greater injustice than grant of it would involve;
3. even if ex-parte injunction should be granted, it should only be for limited period of time, and 16 (2012) 5 SCC 370 17 (1994) 4 SCC 225 OMP (I) (COMM) No. 788/2019 Page 29 of 52
4. general principles like prima facie, balance of convenience and irreparable loss would also be considered by the Court.
54. The Apex Court in the case of Manohar Lal Chopra v. Raj Bahadur Rai Raja Seth Hira Lal18 held --
"We are of opinion that the latter view is correct and that the Courts have inherent jurisdiction to issue temporary injunctions in circumstances which are not covered by the provisions of Order XXXIX, C.P.C. There is no such expression in S. 94 which expressly prohibits the issue of a temporary injunction in circumstances not covered by Order XXXIX or by any rules made under the Code. It is well-settled that the provisions of the Code are not exhaustive, for the simple reason that the Legislature is incapable of contemplating all the possible circumstances which may arise in future litigation and consequently for providing the procedure for them. The effect of the expression, if it is so prescribed is only this that when the rules prescribe the circumstances in which the temporary injunction can be issued, ordinarily the Court is not to use its inherent powers to make the necessary orders in the interests of justice, but is merely to see whether the circumstances of the case bring it within the prescribed rule. If the provisions of S. 94 were not there in the Code, the Court could still issue temporary injunctions, but 18 AIR 1962 SC 537 OMP (I) (COMM) No. 788/2019 Page 30 of 52 it could do that in the exercise of its inherent jurisdiction. No party has a right to insist on the Courts exercising that jurisdiction and the Court exercises its inherent jurisdiction only when it considers it absolutely necessary for the ends of justice to do so. It is in the incidence of the exercise of the power of the Court to issue temporary injunction that the provisions of S. 94 of the Code have their effect and not in taking away the right of the Court to exercise its inherent power."[Emphasis added by highlighting text and underlining]
55. The position in law is well settled that for the grant of relief of an injunction, the case put forward by the petitioner has to be tested upon the trinity touchstone of prima facie case, balance of convenience and irreparable loss and injury caused or likely to be caused to the petitioner.
56. To come to a conclusion, whether the petitioner has a prima facie case in his favour it is observed that the petitioner has sought interim protection under Section 9 of the Act to restrain the respondent form taking coercive action against the petitioner including termination of the toll plaza agreement. The petitioner has urged in the petition that the respondent issued a notice dated 23.01.2019 and thereafter, the petitioner preferred a writ petition19 before the Hon'ble High Court of 19 Md. Usman v. National Highways Authority of India - W.P.(C)No. 1038 of 2019 OMP (I) (COMM) No. 788/2019 Page 31 of 52 Delhi and the same was disposed off vide order dated 01.02.2019.
57. The petitioner has also urged that the respondent through an email dated 20.02.2019 intimated the petitioner about its decision to terminate the contract citing the reason of non- clearing of outstanding dues and such dues being in excess to the available performance security deposited by the petitioner with the respondent. However, the case of the petitioner urged before this court is that there are no outstanding amount, as per the toll gate agreement.
58. I, also deem appropriate to reproduce certain averments made by the petitioner in the petition:
"4. The Respondent invited tenders for the aforementioned Toll Plaza vide NIT dated 27.06.2018. As per Petitioner was highest bidder, he was awarded the Toll Plaza Agreement for collection of User Fee at Rapur Toll Plaza, Andhra Pradesh w.e.f. 03.08.2018 (08:00:00 hrs.) to 03.08.2019 (07:59:59 hrs.). The Petitioner has been diligently collecting and making weekly remittance of toll under the terms of the Toll Plaza Agreement. Till date, a sum of INR 7,88,252/ has been remitted by the Petitioner to the respondent under the Toll Plaza Agreement. It is an undisputed position that there is no amount whatsoever which is due and payable by the Petitioner OMP (I) (COMM) No. 788/2019 Page 32 of 52 to the Respondent under the Toll Plaza Agreement.
5. Inspite of the Petitioner having made all remittances to the Respondent under and in terms of the Toll Plaza Agreement in terms thereof, the Respondent issued a notice dated 23.01.2019 inviting tenders for the collection of user fee at the Rapur Toll Plaza. As the issuance of this notice was contrary to industry practice and was issued without any cause or occasion, and apprehending that the Respondent intended to terminate the Toll Plaza Agreement and invite fresh bids for the Rapur Toll Plaza, the Petitioner was compelled to approach the Hon'ble Delhi High Court by way of a writ petition seeking the quashing of this notice, being W.P. (C) No.1038 of 2019. The said writ petition was listed on 01.02.2019, and on which date the petition was withdrawn ......
7. Clearly, the Respondent's act of terminating the Toll Plaza Agreement is arbitrary, illegal, and would cause irretrievable loss to the Petitioner. It is pertinent to mention that the communication dated 20.02.2019 itself does not provide the details of any purported outstanding dues and neither is it pre-dated by any communication claiming any default in payments on the part of the Petitioner under OMP (I) (COMM) No. 788/2019 Page 33 of 52 the Toll Plaza Agreement. On the other hand, the Petitioner is placing on record bank statements which record timely payments made by it to the Respondent under and in terms of the Toll Plaza Agreement. Therefore, the communication of 20.02.2019 only confirms the Petitioners apprehension that it was harbouring upon the issuance of the communication dated 23.01.2019. It is therefore, evident that the Respondent is attempting to oust the Petitioner by false claiming that the Petitioner is a "defaulter" under the Toll Plaza Agreement. The matters in question are serious issues to be adjudicated upon, and the Respondent certainly cannot arrogate to itself the right to decide on its own contractual defaults by taking coercive steps against the Petitioner."
59. It is observed that though the petitioner has averred in the paragraph No. 6 of the petition that there are disputes between parties with regard to 9(nine) other toll plazas but the petitioner has not uttered a word, what is the dispute about and how much amount is the subject matter of the dispute. It is also observed that the petitioner has stated that there are no dues payable by the petitioner to the respondent and the claim of the respondent is a false claim. However, it is observed that the petitioner has neither filed the copy of the petition 20 nor the list 20 ibid.
OMP (I) (COMM) No. 788/2019 Page 34 of 52of documents and documents filed in support of the petition before the Hon'ble High Court of Delhi.
60. The respondent has urged the defence that not only the dispute is non-arbitrable and beyond the purview of Clause 27 of the toll gate agreement but also the petitioner has armed himself by an order dated 27.02.2019 by blatantly misleading this Court by concealing material facts and documents. I am in consonance with the submissions advanced by the Ld. counsel for the respondent.
61. The arbitration agreement between the parties is nestled in Clause 27 of the toll gate agreement. The case urged by the petitioner is that with regard to the termination of the toll gate agreement, the termination of the contract is not only premature but also the same is under Clause 35(3) and not Clause 35(2). Thus, the notice dated 20.02.2019 is untenable and bad in the eyes of law.
62. The argument advanced by the Ld. counsel for the petitioner seems attractive but I must not refrain from observing that the same is a superficial argument and does not take the case of the petitioner any far. Though, Ld. counsel for the petitioner repeatedly urged and submitted that there is no default on the part of the petitioner and no amount remains unpaid under the toll gate agreement. However, in paragraph OMP (I) (COMM) No. 788/2019 Page 35 of 52 No. 14 of the petition has averred that this Court has pecuniary jurisdiction to enter the petition, as the total amount payable by the petitioner under the toll plaza plaza agreement is ₹14,19,786/- (Rupees Fourteen lakhs nineteen thousand seven hundred and eighty six only), and whereas, the petitioner has subtle averred in the petition that there is a dispute about 9(nine) toll plazas between the petitioner and the respondent.
63. The case of the petitioner is that the dispute arisen between the parties is an arbitrable dispute and beyond the exceptions culled out in Clause 26 of the toll gate agreement. Whereas, the respondent has urged that not only the petitioner fails to satisfy the sine qua non for grant of relief of an injunction but also the petitioner has misled this Court by concealing material facts and documents. The respondent has filed both the documents along with its reply on 15.05.2019. On perusal of the show cause notice dated 02.01.2019 it is observed that the petitioner has entered into multiple contract agreements with the respondent, regarding collection of user toll fee on behalf of the respondent. The respondent has in the show cause notice dated 02.01.2019 unequivocally stated that the petitioner has failed to deposit dues to the tune of ₹26.80 crores and the respondent called upon the petitioner to deposit the outstanding dues within 15(fifteen) days from the date of OMP (I) (COMM) No. 788/2019 Page 36 of 52 issuance of the notice. The respondent had also put the petitioner to notice as to why action of debarment/blacklisting should not be initiated against the petitioner.
64. Interestingly, the petitioner has replied to the show cause notice dated 02.01.2019 through reply dated 15.01.2019 but has knowingly failed to place the same before this Court. The petitioner in his response dtd. 15.01.2019 cited occurrence of force majeure events, and claimed reimbursement from the respondent. It is observed that the petitioner in the reply dated 15.01.2019 has requested for a waiver of penal interest and arrange for funds to clear the outstanding dues and in the meantime, the respondent may keep the show cause notice dated 02.01.2019 at abeyance, as the petitioner is committed to deposit all the outstanding payments due to the respondent. It is also observed that the petitioner sought restoration of his pre- qualification status to participate in the bids of the respondent and continue his business activities, which would help him in fund realization and easy settlement of the outstanding dues of the authority.
65. Subsequently, when the respondent issued a notice dated 23.01.2019 inviting bids for collection of user fee at the Rapur toll plaza, the petitioner preferred a writ petition before the Hon'ble High Court of Delhi. It is observed that the said writ OMP (I) (COMM) No. 788/2019 Page 37 of 52 was disposed off vide order dated 01.02.2019. Thereafter, the respondent terminated the toll plaza agreement by issuing a notice dated 20.02.2019 and granted 7(seven) days notice period, as per Clause 35(2) of the toll plaza agreement. It is observed the petitioner preferred the present petition under Section 9 of the Act before this Court on 23.02.2019 and the same was taken up for first hearing on 25.02.2019, when the notice was issued to the respondent returnable for 27.02.2019. It is observed htat when none appeared for the respondent on 27.02.2019 this Court directed the respondent to maintain status quo, not take any coercive steps against the petitioner and also maintain status quo ante, as on 25.02.2019.
66. The court passed the order at 04:00P.M. on 27.02.2019, whereas, the admitted position is that the respondent had already taken over the possession from the petitioner and handed over the same to a newly appointed bidder on 27.02.2019 at 08:00A.M. It is observed that had the petitioner not withheld the show cause notice dated 02.01.2019 and reply dated 15.01.2019 to the said show cause notice, this Court ought to not have passed the order dated 27.02.2019 directing the respondent to maintain staus quo, not to resort to coercive steps and maintain status quo ante, as on 25.02.2019.
OMP (I) (COMM) No. 788/2019 Page 38 of 5267. I, must say that the submission advanced by the Ld. counsel for the petitioner that neither the show cause notice nor its reply pertain to the present subject matter before this Court i.e. Rapur toll plaza do not impress me. It is observed that the aforesaid show cause notice and its reply are not irrelevant and it would be incorrect to adhere to the submission of the Ld. counsel for the petitioner that they have no bearing upon the present case. It is observed that rule of fairness is an interwoven golden thread in the administration of justice. A party who withholds material facts and documents cuts the umbilical cord of justice. It is further observed that to arm oneself by an order of the Court of Justice by withholding complete facts and documents is frowned upon and the same may have adverse consequences.
68. For the reasons best known to the petitioner, for not uttering a word about the aforesaid show cause notice dated 02.01.2019 and his reply dated 15.01.2019 in the petition, the same disrobes the petitioner of meeting the prerequisite of a prima facie case in favour of the petitioner.
69. With the contract being a determinable contract, I am of the view that assuming for the sake of arguments that the respondent has wrongly terminated the contract, regardless the damage caused to the petitioner can be ascertained and further OMP (I) (COMM) No. 788/2019 Page 39 of 52 the petitioner can be compensated in money, as an adequate relief. Thus, no irreparable loss and injury would be caused to the petitioner.
70. I am also of the view that in view of the discussions and observations in the preceding paragraphs, the balance of convenience does not lie in favour of the petitioner and against the respondent.
71. An order for an injunction may be discharged, varied or set aside by a Court on an application made to it by a party dissatisfied with the order.
72. However, if in an application for a temporary injunction or in an affidavit supporting such an application a party knowingly makes a false or misleading statement in relation a particular and the injunction was granted without giving notice to the opposite part, the court must vacate the injunction unless, for reasons to be recorded, it considers that it not necessary to do so in the interests of justice.
73. I, place reliance upon S.P. Chengalvaraya Naidu (Dead) by LRs v. Jagannath (Dead) by LRs.,21 wherein the Apex Court held that the courts of law are meant for imparting justice between the parties. One who comes to the court, must come with clean hands. The Apex Court further held that a person, who's case is based on falsehood, has no right to approach the 21 (1994) 1 SCC 1 OMP (I) (COMM) No. 788/2019 Page 40 of 52 court. He can be summarily thrown out at any stage of the litigation.
74. The Apex Court held and observed that a litigant, who approaches the court, is bound to produce all the documents executed by him which are relevant to the litigation. If he withholds a vital document in order to gain advantage on the other side then he would be guilty of playing fraud on the Court, as well as on the opposite party.
75. In view of the ratio of S.P. Chengalvaraya Naidu (Dead) by LRs v. Jagannath (Dead) by LRs.,22the petitioner before this Court, has withheld material documents. It is observed that the petitioner neither averred about the show cause notice dated 02.01.2019 and his reply dated 15.01.2019 to the show cause notice nor placed the aforesaid documents on record. It is further observed that the order dated 27.02.2019 is bound to be varied.
76. With regard to the submissions advanced by the Ld. counsel for the respondent that the petitioner has knowingly concealed the material facts and documents it is imperative to refer to the show cause notice dated 02.01.2019 issued by the respondent to the petitioner. It is not out of place to mention herein that the petitioner indeed replied to the show cause notice dated 02.01.2019 through reply dated 15.01.2019. 22 ibid.
OMP (I) (COMM) No. 788/2019 Page 41 of 5277. This court observes that the petitioner nowhere in his petition and even in the list of dates and events filed to the petition has uttered one word about the issuance and receipt of show cause notice dated 02.01.2019 by the respondent to the petitioner. It is also observed that the petitioner's reply dated 15.01.2019 to the show cause notice dated 02.01.2019 filed by the respondent has not been refuted by the petitioner. It is further observed that the petitioner has maintained complete radio silence about the ₹26.80 crores sought by the respondent from the petitioner.
78. This court cannot lose sight that the present dispute is a commercial dispute and the provisions of the Commercial Courts Act, 2015 are attracted on its four to the present legal proceedings. It is observed that the petitioner along with the petition has filed Statement of Truth in support of the petition. I deem appropriate to reproduce the petitioner's Statement of Truth in support of the petition, which reads as under:
"IN THE COURT OF THE DISTRICT JUDGE, DWARKA DISTRICT COURTS, SOUTH WEST DISTRICT, NEW DELHI O.M.P.(I) (COMM) NO. OF 2019 IN THE MATTER OF:
MD. USMAN ...
PETITIONER
OMP (I) (COMM) No. 788/2019
Page 42 of 52
VERSUS
NATIONAL HIGHWAYS AUTHORITY OF
INDIA ...
RESPONDENT
STATEMENT OF TRUTH
(Under First Schedule, Order VI, Rule
15A, and Order X, Rule - 1)
Statement of Truth by Md. Usman, S/o
Maulana aged about 60 years, resident of Door No. 29/28, 1-22, Kovelamudivari Street, Near Swathi Press, Suryaraopet, Vijayawada - 520 002, presently at New Delhi, the Deponent abovenamed, do hereby solemnly affirm and declare as under:
1. That, I am the Petitioner and I am competent to file the present petition.
2. I am sufficiently conversant with the facts of the case and have also examined all relevant documents and records in relation thereto.
3. I say that the statements of facts made in Paras 1 to 16 are true to my knowledge based on the records maintained by me, and the Statements made in Grounds A - G in Para Grounds are based on legal advice. The statements in Paras 9 - 15 are based on legal advice and I believe the same to be correct.OMP (I) (COMM) No. 788/2019 Page 43 of 52
4. I say that there are no false statements or concealment of any material fact, document or record and I have included information that is according to me, relevant for the present petition.
5. I say that all documents in my power, possession, control or custody, pertaining to the facts and circumstances of the proceedings initiated by me have been disclosed and copies thereof annexed with the Petition, and I do not have any other documents in my power, possession, control or custody.
6. I say that the above captioned pleading comprises of a total 15 pages each of which has been signed by me.
7. I say that the Annexures hereto are true copies of the documents referred to and relied upon by me.
8. I say that I am aware that for any false statement or concealment, I shall be liable for action taken against me under law.
Sd/-
DEPONENT VERIFICATION The statements made above are true to my knowledge.
OMP (I) (COMM) No. 788/2019 Page 44 of 52Verified at New Delhi on tis 22th dat of February 2019.
Sd/-
DEPONENT"
[Emphasis added by underlining and highlighting of text]
79. The Commercial Courts Act, 2015 in clear words state that a party has to place all the documents on record for proper adjudication of the dispute.
80. The dictum in law is as old as the hills, one who seeks equity must do equity. The petitioner has withheld material documents particularly, show cause notice dated 02.01.2019 and petitioner's own reply dated 15.01.2019 to the show cause notice dated 02.01.2019.
81. With regard to the reliance placed by Sh. Angad Mehta, Ld. counsel for petitioner on the judgment passed by the Hon'ble Supreme Court In the Matter of Anil Panjwani23 on the proposition that the contemner (respondent herein) cannot be heard unless the contempt is purged, I am of the view that the same cannot be read blindly.
82. I, would like to place reliance upon the judgment passed by the Apex Court in the case of Sundeep Kumar Bafna v. State of Maharashtra & Anr.,24 wherein His Lordship 23 (2003) 7 SCC 375 24 Criminal Appeal No.689/2014 decided on 27.03.2014 OMP (I) (COMM) No. 788/2019 Page 45 of 52 Vikramjit Sen, J., held that reliance on a judgment should not be placed on the basis of mere reading of the head note. I observe this with all due deference that in the present case the reliance placed by petitioner on In the Matter of Anil Panjwani25 is misplaced. It is observed that in paragraph 6 of the judgment, the Apex Court has held that it is no rule of law and certainly not a statutory rule that the contemner cannot be heard unless the contempt is purged. It has only developed as a rule of practice for protecting the sanctity of the court proceedings and the dignity of the court that a person who is prima facie guilty of having attacked the court may be deprived of the right of participation in hearing lest he should misuse such opportunity unless he has agreed to disarm himself. The court would not be unjust in denying herein to one who has shown his lack of worth by attacking the court unless he has agreed to beat a retreat and the court is convinced of the genuineness of such retreating. It is further observed that the Apex Court in the very same paragraph has observed that it would all depend on the facts and circumstance of the given case and the nature of contempt under enquiry which would enable the court exercising its discretion either way.
25 (2003) 7 SCC 375 OMP (I) (COMM) No. 788/2019 Page 46 of 52
83. It is observed that In the Matter of Anil Panjwani 26 the Apex Court held that it is a flexible rule of practice and not a rigid rule of law. The discretion shall be guided and governed by the facts and circumstance of the given case.
84. That said, the application moved by the petitioner under Order XXXIX, Rule 2A, CPC is bound to fail and the same is dismissed in view of the above observations and discussion.
85. The dispute between the parties is a commercial dispute and the same is subject to the provisions of the Commercial Courts Act, 2015. With respect to commercial disputes, the provision of costs under Section 35 CPC stands amended, and the provision of costs with respect to commercial cases is now to be dealt with by the commercial courts as per Section 35 of the CPC amended and as applicable to commercial courts as under:-
"Section 35. Costs. (1) In relation to any commercial dispute, the Court, notwithstanding anything contained in any other law for the time being in force or Rule, has the discretion to determine:
(a) whether costs are payable by one party to another;
(b) the quantum of those costs; and
(c) when they are to be paid.
26 (2003) 7 SCC 375 OMP (I) (COMM) No. 788/2019 Page 47 of 52 Explanation.--For the purpose of clause (a), the expression ―costs‖ shall mean reasonable costs relating to--
(i) the fees and expenses of the witnesses incurred;
(ii) legal fees and expenses incurred;
(iii) any other expenses incurred in connection with the proceedings.
(2) If the Court decides to make an order for payment of costs, the general rule is that the unsuccessful party shall be ordered to pay the costs of the successful party:
Provided that the Court may make an order deviating from the general rule for reasons to be recorded in writing.
Illustration: The Plaintiff, in his suit, seeks a money decree for breach of contract, and damages. The Court holds that the Plaintiff is entitled to the money decree. However, it returns a finding that the claim for damages is frivolous and vexatious.
In such circumstances the Court may impose costs on the Plaintiff, despite the Plaintiff being the successful party, for having raised frivolous claims for damages.
(3) In making an order for the payment of costs, the Court shall have regard to the following circumstances, including--
(a) the conduct of the parties;OMP (I) (COMM) No. 788/2019 Page 48 of 52
(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful;
(c) whether the party had made a frivolous counterclaim leading to delay in the disposal of the case;
(d) whether any reasonable offer to settle is made by a party and unreasonably refused by the other party; and
(e) whether the party had made a frivolous claim and instituted a vexatious proceeding wasting the time of the Court.
(4) The orders which the Court may make under this provision include an order that a party must pay--
(a) a proportion of another party's costs;
(b) a stated amount in respect of another party's costs;
(c) costs from or until a certain date;
(d) costs incurred before proceedings have begun;
(e) costs relating to particular steps taken in the proceedings;
(f) costs relating to a distinct part of the proceedings; and
(g) interest on costs from or until a certain date."
86. A reading of Section 35 CPC as applicable to Commercial Courts shows that costs can be imposed at different stages of the suits including at the time of disposal of the interim applications. Costs awarded are under different OMP (I) (COMM) No. 788/2019 Page 49 of 52 heads as provided under Sub-Section (4) of Section 35 CPC. In making an order of payment of costs Courts have to take note of the conduct of the parties and the fact that whether any reasonable offer is made by one party to settle the disputes and which is refused by the other party. It is observed that the conduct of the petitioner is not forth coming.
87. The amendment to the Code of Civil Procedure, 1908 (hereinafter "CPC") pursuant to the enactment of the Commercial Courts, Act, 2015 particularly, in terms of Section 16 of the Commercial Courts, Act, 2015, Section 35 of the CPC with regard to the commercial dispute stands amended. I deem it appropriate to resort to Section 35 CPC, as amended by the Commercial Courts, Act, 2015 and saddle the petitioners with costs of ₹50,000/- (Rupees Fifty thousand only). Let one half of the costs i.e. ₹25,000/- (Rupees Twenty five thousand only) be paid by the petitioner to the respondent within four weeks and the second half of ₹25,000/- (Rupees Twenty five thousand) be deposited with Delhi Child Welfare Fund, A/c No. 30269984245, State Bank of India, IP Estate, New Delhi within four weeks. Proof of deposit of costs be filed on or before 03.07.2019.
88. Since the present petition is a petition under Section 9 of the Act, I am of the considered view that I shall refrain from OMP (I) (COMM) No. 788/2019 Page 50 of 52 discussing the various issues at length, as the same may prejudice either of the parties before the arbitral tribunal. The position in law is well settled courtesy doctrine of Kompentenz Kompetenz that an arbitrator is competent to rule on its jurisdiction.
89. I am of the view that no prima facie case exists in the favour of the petitioner, neither balance of convenience lies in favour of the petitioner nor irreparable loss and injury, which cannot be compensated in terms of money would be caused to the petitioner. In short, no case is made out by the petitioner, which must entitle the petitioner to seek grant of relief of restoration of the contract and to direct the respondent to maintain status quo, particularly status quo ante with regard to the communication dated 20.02.2019.
90. In view of the aforesaid discussion, the petition under Section 9 of the Act and the application moved by the petitioner under Order XXXIX Rule 2A CPC is dismissed.
91. I would like to add a word of caution, that the observations in the preceding paragraphs are prima facie view for disposal of the petition under Section 9 of the Act and interim applications moved by the petitioner and respondent, respectively, and the same shall not tantamount in any manner to be the view on the merits of the case.
OMP (I) (COMM) No. 788/2019 Page 51 of 5292. Thus, in view of the facts and circumstances no case is made out for allowing the prayers of petitioner on the petition under Section 9 of the Act. The interim order dated 27.02.2019 is vacated and the parties are at liberty to proceed in accordance with law. The petition is dismissed with costs of ₹50,000/- (Rupees Fifty thousand only), as mentioned in the preceding paragraph, particularly, paragraph No. 87 of this order/judgment.
93. Consequentially, the application moved by the respondent under Order XXXIX, Rule 4, CPC is dismissed as infructuous. File be consigned to record room only after due compliance and necessary action, as per Rules.
Digitally signed byHARGURVARINDER HARGURVARINDER SINGH JAGGI SINGH JAGGI Date: 2019.05.20 17:30:31 +0530 Pronounced in the open (Hargurvarinder Singh Jaggi) Court on 20.05.2019 Addl. District Judge-02 South West District Dwarka Courts Complex New Delhi OMP (I) (COMM) No. 788/2019 Page 52 of 52