1. The applicant/petitioner has approached this Court under Section 9 of the Arbitration and Conciliation Act, 1996 with a prayer that the Court should issue an interim injunction restraining the respondents from terminating the contract awarded to the applicant/petitioner and should also give directions to the respondents not to invoke the Performance Bank Guarantee, Machinery Advance Guarantee and Mobilization Advance Guarantee furnished by the applicant and restraining respondents from taking any other coercive or adverse steps of towards the applicant.

2. The facts relevant for the purpose of deciding the present application are that the applicant had entered into a contract with the respondent for 4-laning of National Highway No. 28 between Gorakhpur and Gopalganj from km 360.915 to km 402.00. Thus, the length of construction of 4 laning awarded to the petitioner measured 41.085 kms. The initial contract was entered into between parties on 20.10.2005. The last date for completion of the 4-laning work was November, 2008. The work was not completed within the stipulated period and the petitioner/applicant made representation to the respondent not to cancel the contract and to grant extension of the time for completion of the work. A supplementary agreement dated 27.11.2008 was executed between the parties and in the supplementary agreement, the applicant/petitioner had undertaken to do a specific percentage of work each month starting from December, 2008 to May, 2009. The agreed percentage is as under: The contract hereby undertakes that it shall expedite the progress of works and shall achieve the minimum monthly progress of works as stated below: a) December, 08 - 2% b) January, 09 - 3% c) February, 09 - 3% d) March, 09 - 3.5% e) April, 09 - 3.5% f) May, 09 - 4%

3. Clause 3 of this agreement provides that in case the contractor failed to achieve the required minimum progress as stated above in any of the calendar month, the respondent shall have absolute right (without being required to give a notice to contractor) to terminate the contract and enter upon the site. Exception was made in case of force majeure conditions. It was also stated that the contractor shall not be entitled to adjust any shortfall in the stipulated minimum progress of work in a particular month as provided in para above to the subsequent month(s) or any other month. Clause 5 of the agreement provided as under: The Contractor hereby undertakes that it shall maintain sufficient, staff, labour and equipment for effective progress of works. The Contractor further undertakes that it shall have available at site the aggregates and other construction materials sufficient for next 15 days of work, required for achieving the above minimum progress of works.

4. The facts reveal that during month of December itself, the applicant was not able to achieve the target of 2% of the work progress, the progress made was 1.337 %. Letter dated 5.1.2009 written by the applicant to the respondent gave the reasons as to why this progress could not be achieved and the main reason given was extreme climatic condition prevalent during December, 2008.

5. Respondent issued a show-cause notice dated 19.1.2009 to the applicant/petitioner as to why action should not be taken under the terms of supplementary agreement read with the original contract and why the contract be not terminated. Under these circumstances, the petitioner approached this Court.

6. This Court under Section 9 of the Arbitration and Conciliation Act cannot give direction to a party of not terminating the contract or to continue with the contract. If the contract is terminated, the applicant/petitioner shall have rights as available to him under law. It is the right of a party not to continue with a contract and the Court cannot force a contract on somebody under Section 9 of Arbitration and Conciliation Act.

7. The Counsel for the applicant in fact pressed for second relief that the respondent should be

Click Here to Read the rest of this document