Delhi High Court - Orders
Texmaco Rail & Engineering Ltd vs Union Of India And Anr on 13 December, 2023
Author: Prateek Jalan
Bench: Prateek Jalan
$~40
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 9858/2015 & CM APPLs. 23784/2015, 49508/2018.
TEXMACO RAIL & ENGINEERING LTD. ..... Petitioner
Through: Mr. Kailash Vasdev, Sr. Adv. with
Mr. Vijayender Kumar, Ms.
Maharshi Kalra, Ms. Sheetal
Srivastava, Advocates.
versus
UNION OF INDIA AND ANR ..... Respondents
Through: Mr. Arnav Kumar, CGSC with Mr.
Aranya Sahay, Mr. Gurdas
Khurana, Advocates.
CORAM:
HON'BLE MR. JUSTICE PRATEEK JALAN
ORDER
% 13.12.2023
1. By order dated 24.07.2023, it was recorded as follows:
"2. Mr. Kailash Vasdev, learned Senior Counsel for the petitioner, submits that the point to be decided in this petition pertains to the "Composite Material and Wage Escalation Clause" in a contract between the parties. The clause is reproduced at pages 82 and 83 of the writ petition. The grievance of the petitioner arises out of sub- clause (3) thereof which provides that the decision of the President of India with regard to wage and material escalation shall be final, and not be subject to legal disputes or arbitration. Mr. Vasdev submits that such a clause deprives the petitioner of its legal remedies and is contrary to public policy and specific statutory provisions in the Indian Contract Act, 1872."
2. There is some dispute as to the exact clause in issue, but Mr. Kailash Vasdev, learned Senior Counsel for the petitioner, submits that the grievance of the petitioner relates to clauses in the contract by which W.P.(C) 9858/2015 Page 1 of 3 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/12/2023 at 23:11:14 the petitioner's recourse to "legal dispute or arbitration" has been restricted.
3. Mr. Arnav Kumar, learned Central Government Standing Counsel for the Union of India, concedes that the blanket restriction on recourse to "legal dispute or arbitration" is untenable, as it renders the petitioner remediless. However, he submits that the law recognises that arbitration clauses may be limited to certain kinds of disputes. In this context, he states that the petitioner may be permitted to file civil proceedings in the competent Court with regard to its claims. My attention has also been drawn to the arbitration clause contained in Clause 18 of the agreement (at page 95-96 of the writ petition), which provides for an exception to the width of the clause where matters have been reserved specifically by the general or special conditions of the contract.
4. Mr. Vasdev is not agreeable to resolution of the matter in these terms. He submits that the entire clause restricting "legal disputes or arbitration" has to be struck down and the petitioner must be permitted to invoke arbitration.
5. I am prima facie of the view that the scope of an arbitration clause can be restricted by excepting some kinds of disputes from the ambit of arbitration. The contracting party is not left remediless in such a situation as it is always entitled to file a civil suit in respect of such claims as come within the ambit of "excepted matters".
6. As this legal position is disputed by Mr. Vasdev, the petitioner is directed to file written submissions, specifically dealing with the issue framed above, within two weeks from today. The respondent will file its written submissions, in the context of Mr. Kumar's statement above, W.P.(C) 9858/2015 Page 2 of 3 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/12/2023 at 23:11:14 within two weeks thereafter.
7. List on 20.03.2024.
PRATEEK JALAN, J DECEMBER 13, 2023 "Bhupi"/ W.P.(C) 9858/2015 Page 3 of 3 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/12/2023 at 23:11:15