Point of Law: Interim measures, etc. by courts - Ex-parte stay and Show Cause Notice - No valid ground to interdict respondents from considering show cause notice and taking an informed decision with regard to contract and on question of blacklisting petitioner.

JUDGMENT :

VIBHU BAKHRU, J.

1. The petitioner has filed the present petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereafter A&C Act), inter-alia, praying as under:

“(a) Ex-parte stay and set aside the Show Cause Notice dated 24.02.2020 issued by the Respondents.

(b) Direct the Respondents to pay the due amount of Rs. 1,89,91,737/- (Rupees One Crore Eighty Nine Lakh Ninety One Thousand Seven Hundred and Thirty Seven Only) to the Petitioner and allow the Petitioner to continue to complete the work by providing modified dam drawings.

OR, in the alternative

Direct the Respondents to secure the due amount of Rs. 1,89,91,737/- (Rupees One Crore Eighty Nine Lakh Ninety One Thousand Seven Hundred and Thirty Seven Only) by way of a bank guarantee or by deposit with the Court during the pendency of the present petition and the arbitration proceedings.

(c) Direct the Respondents to withdraw the Termination Notices dated 06.01.2020, 13.01.2020 and 28.01.2020, and restrain the Respondents from taking any such adverse/ coercive actions against the Petitioner during the pendency of the present petition.”

2. The respondent no. 2 (hereafter ‘EIL’) had invited e-bids for “Composite Works for Development of Infrastructure Facilities at Khajekhalan Ghat, Patna Sahib, Patna” on behalf of respondent no. 1 (hereafter ‘IOF’). The petitioner had submitted its bid which was accepted by the respondents and a Letter of Acceptance was issued by EIL on 13.09.2018. Thereafter, the petitioner entered into a contract with IOF (through EIL) on 10.10.2018. The petitioner states that the work front was handed over to the petitioner on 09.02.2019, after much delay.

3. It is the petitioner's case that since the work site was on a river front, the petitioner was required to construct a cofferdam to protect the site from inflow of water. The petitioner did so as per the design provided by EIL. However, on 12.04.2019, there was heavy rainfall resulting in breach of the cofferdam. Consequently, the entire site was inundated and the petitioner had to incur substantial expenditure for clearing the site. It is the petitioner's case that it had suggested that a dam be constructed by sheet piling method. However, EIL did not accept the same and the destruction was caused due to faulty design of the cofferdam. The petitioner claims that despite the above, EIL insisted that a cofferdam be reconstructed by the petitioner. The petitioner did so but the said cofferdam was again destroyed on 04.05.2019.

4. The petitioner claims that it had submitted it Fifth RA Bill, which was revised on 27.08.2019, for a sum of Rs. 1,15,31,770/-. However, the same remains unpaid. The petitioner also claims that the delay in construction was caused due to various reasons attributable to the respondents. The petitioner also claims that despite the petitioner's request for a comprehensive insurance policy, the respondents had failed to accept its suggestion. In addition, the petitioner claims that there was substantial delay in handing over the above front. This also adversely affected the progress of the works and caused a major setback to the project. Further, the petitioner claims that the respondents had persistently delayed in making payments towards the work done and this resulted in the petitioner facing a severe liquidity crunch, which resulted in further delay in executing the works. The petitioner also claims that the pace of decision making with the respondents was extremely slow. This also made it difficult to maintain the progress of works. The petitioner applied for extension of time for completion of works, however, the same has not been granted.

5. The petitioner claims that a sum of Rs. 1,89,91,737/- is owed by the respondents to the petitioner which includes cost and losses suffered by the petitioner due to destruction of cofferdams.

6. The respondents dispute the assertions made by the petitioner. According to the respondents, the petitioner had failed to perform i