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1999 Supreme(Del) 12

High Court Of Delhi
B.S.M.CONTRACTORS PRIVATE LIMITED - Appellant
Versus
RAJASTHAN STATE BRIDGE AND CONS.CORPN.LIMITED - Respondent
Interim Application 1153 of 1998
Decided On : 01/01/1999

Advocates Appeared:
ANSUYA GOSVAMI, H.N.CHAUDHARY, SHYAM MURJANI

Headnote:Arbitration & Conciliation Act, 1996 - Section 9 — Interim injunction — Specific performance of contract of construction — Relief against forfeiture would be equivalent to specific performance which cannot be granted by interim injunction — Contractor can be adequately compensated by damages — Interim injunction refused.

M. S. A. Siddiqui, J.

( 1 ) BY this order, I propose to dispose of the OMP No. 196/98 and the IAs No. 7479/98, 8503/98, 10451/98 and 11511/98.

( 2 ) IA No. 7479/98 is an application under Order 39 Rule 1 and 2 Civil Procedure Code filed by the petitioner seeking an ad interim injunction. IAs No. 8503/98 and 10451/98 are applications filed by the respondents seeking vacation of the ex-parte injunction order dated 2/9/98. IA No. 1511/98 is an application u/o 7 R 11 Civil Procedure Code filed by the respondent No. 2 for rejection of the OMP No. 196/98.

( 3 ) TO appreciate the merits of the controversy, it will be necessary to give brief narration of the material facts. The respondent No. 3 entered into an agreement with the respondent No. 1 for construction of D. I. T. Complex at Dwarka (Phase I and II ). The estimated cost of the contract was Rs. 5,45,72,958. 00. The respondent No. 1 invited labour rate tenders for construction of Boys Hostel at D. I. T. Complex, Sector 3, Dwarka, New Delhi. Consequent upon acceptance of tender submitted by the petitioner, the respondent No. 1 and the petitioner entered into two separate agreements dated 20/10/1997 (agreement No. 1/97 and agreement No. 2/97 Annexure A-3) by virtue of which the petitioner was to execute the work of construction of DIT complex (R. C. C. frame and brick work, flooring, furnishing and electrical installation work etc.) for a total estimated cost of Rs. 225 lacs. The stipulated dates of commencement of the work and the completion thereof were 20/10/1997 and 19/10/1998 respectively. According to the petitioner, the petitioner completed the work stipulated in the agreement No. 1/97 within six months. But, in certain items the quantities exceeded beyond the deviation limits provided in the agreement and the petitioner requested the respondent No. 1 to take decision with regard to the rates to be applied for the deviated quantities. The petitioner also represented to the respondent No. 1 to award balance work of the entire contract to it as the finishing items of the agreement No. 2/97 could be executed only on completion of the entire structural work of the DIT complex. However, the said representation did not evoke any positive response from the respondent No. 1. Since the respondent No. 2 wanted to take the unexecuted part the work out of the hand of the petitioner and give to another contractor, he started harassing the petitioner. Thus, the disputes have arisen between the petitioner and the respondent no. 1 in relation to the said contract which are to be resolved by arbitration in accordance with the arbitration agreement. On these allegations, the petitioner filed the present petition u/s 9 of the Arbitration and Conciliation Act, 1996 (for short "the Act") for an interim relief by way an injunction restraining the respondents from getting the construction work executed from any other agency or contractor and from utilising the petitioner s material, T and P, Centring and Shuttering etc. lying at the site.

( 4 ) THE petition has been opposed by the respondents on the ground that the petitioner has deliberately suppressed the material facts. According to the respondents No. 1 and 2, the petitioner did not complete the contract within the stipulated time. Despite service of notice, the petitioner did not execute the remaining work in accordance with the contract as a result whereof the contract was rescinded by the respondent No. 1. The unexecuted part of the work is to be completed departmentally. The respondent No. 1 is entitled to recover a sum of Rs. 54,94,684. 00 from the petitioner on account of excess payment made to it. It is further alleged that the material lying at the site belonged to the respondent No. 1. On these allegations, it is contended that the petitioner has failed to make out a case for grant of temporary injunction. The respondent No. 3 pleaded that since the respondent was not a party to the arbitration agreement, the present petition is not











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