Back
2015 Supreme(Del) 105
High Court of Delhi
V. KAMESWAR RAO, J.
Sikaria Mega Food Park(P) Ltd. - Appellant
Versus
Union of India - Respondent
O.M.P. No. 89 of 2015
Decided on: 27-01-2015
For the Petitioner:Sandeep Sethi, Sr. Advocate with C. Mukund, Pankaj Jain, Advocates.
For the Respondent:Ruchir Mishra, with Mukesh Kr. Tiwari, Advocates.
The court emphasized the limitations on enforcing contracts against the government and the restrictions imposed by the Specific Relief Act in granting specific relief.
Headnote:
Arbitration & Conciliation Act - Petition under Section 9 - 7.2(1) of Memorandum of Agreement - [1996 (Act), 7.2(1)] - The court discussed the reliefs sought under Section 9 of the Arbitration & Conciliation Act, 1996 and the respondent's actions in relation to the agreement for the construction of a Mega Food Park. The court analyzed the notice issued by the respondent, the petitioner's response, and the legal provisions governing termination of the agreement. The court considered the legal principles related to termination of contracts and the specific relief act in reaching its decision.
Fact of the Case:
The petitioner sought interim orders to restrain the respondent from acting on a preliminary notice and terminating the agreement for a Mega Food Park project. The petitioner alleged that the respondent's actions had hindered the project's implementation, leading to financial constraints. The respondent argued that the petition was premature as no decision had been made on the notice issued to the petitioner.
Finding of the Court:
The court found that the notice issued by the respondent and the deficiencies pointed out were subject to the respondent's decision. The court held that the petition was premature and that specific relief could not be granted under the Specific Relief Act. The court also emphasized the principles related to termination of contracts and the limitations on enforcing contracts against the government.
Issues: The issues revolved around the petitioner's request for interim orders, the respondent's actions, and the applicability of specific relief in the context of government contracts.
Ratio Decidendi: The court's decision was based on the premature nature of the petition, the limitations imposed by the Specific Relief Act, and the principles governing contracts with the government.
Final Decision: The petition was dismissed with no order as to costs.
V. Kameswar Rao, J.
1. In this petition filed under Section 9 of the Arbitration & Conciliation Act, 1996 (‘Act’ in short), the following reliefs are sought:-
(a) Pass interim orders restraining the respondent from, in any manner, acting in furtherance to ‘Preliminary Notice’, bearing F. No.6-MFPI/11-Mega FP, dated 13.11.2014.
(b) Pass interim orders restraining the respondent from, in any manner, terminating the agreement, accorded vide Final Approval by respondent, bearing No.06-MFPI/11-Mega FP, dated 30.11.2011, and/or under Article 7 of Memorandum of Agreement dated 24.02.2012.
(c) Pass ad-interim ex-parte orders in terms of prayers (a) and (b) hereinabove; and
(d) Pass such further and other order(s) as this Court deems fit and proper in the facts and circumstances of the case.
Facts
2. It is the case of the petitioner that the respondent invited tender for construction of a Mega Food Park under the Mega Food Parks Scheme (MFPS), to provide excellent infrastructural facilities for food processing along with the value chain from farm to market. A final approval to the petitioner was conveyed by the respondent on November 30, 2011, in the state of Tripura, for a total project cost of Rs.87.45 Crores including grant in aid of Rs.50 Crores. The means of finance, to be precise was to be as under:
(i) Promoter’s contribution – Rs.20.45 Crores
(ii) Ministry of Food Processing, Government of India Grant– Rs.50 Crores
(iii) Bank Loan – Rs.17 Crores
3. It is the case of the petitioner that the activities pursuant to the understanding commenced immediately on the issuance of the approval referred above. A Memorandum of Agreement (‘Agreement’, in short) was executed on February 24, 2012. For the purpose of receiving the grant in aid, the petitioner entered into an agreement with Punjab National Bank, Kolkata. According to the petitioner, while receiving grant in aid of Rs.15 Crores as against Rs.50 Crores from the respondent, it through itself and its agents and contractors executed work to set up the said project and till the end of August, 2014 had spent an aggregate of Rs.28.76 Croers and its own contribution from its association was Rs.14.57 Crores. It is alleged by the petitioner, against the second instalment of the eligible grant of Rs.15 Crores, was restricted to Rs.5.79 Crores due to non availability of funds. It is also alleged that on one occasion the respondent vide its letter dated March 29, 2013 had asked the bank, not to release the amount transferred to the bank, in favour of the petitioner. The clarifications sought from the petitioner on the project were provided. A communication dated April 22, 2014, was issued by the respondent seeking certain clarification with regard to the project. A review meeting was held on June 09, 2014. Thereafter the case of the petitioner is, it was shocked to receive a show cause notice dated July 22, 2014, under paragraph 7.2(1) of the Agreement from the respondent. The petitioner’s case is also, it painstakingly point by point gave an elaborate reply to the respondent on July 30, 2014 and, overlooking the reply, the respondent had sent notice dated November 13, 2014 received on November 22, 2014, purportedly under 7.2(1) of the Agreement, calling upon the petitioner to satisfactorily address the deficiencies in implementation of the project within 60 days failing which the Ministry will terminate the agreement, to which a response was given by the petitioner on January 10, 2015; and on repeated interaction, with the officials of the respondent, they are waiting for either completion of 60 days or response from the petitioner, whereafter they would terminate the agreement. It is in the aforesaid background the petition has been filed, seeking the reliefs already referred above.
4. It may be mentioned here, that the petition was initially listed on January 19, 2015, when notice on the petition was issued to the respondent for January 20, 2015. On January 20, 2015, the respondent is represen
