The main legal point established in the judgment is that in the case of a determinable contract, no injunction against termination and enforcement of the contract can be issued.

ORDER

Chandra Dhari Singh, J. (Oral)

I.A. 6479/2023 (Exemption)

Exemption allowed subject to just exceptions.

The application stands disposed of.

O.M.P.(I) (COMM.) 106/2023

1. The instant petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") has been filed on behalf of the petitioner inter alia seeking an ad interim stay on the Termination Order dated 7.3.2023, as well as on the Notice inviting bids dated 24.2.2023 issued by the Respondent No. 1 with respect to the "Construction of 2 Laning with Hard Shoulder of Peren - Dimapur section on NH-129A from Design Km 126.775 to Km 146.208 (Length - 19.433 Km) in the state of Nagaland on EPC mode (PKG-11) under NH(O)-TSP" (hereinafter referred to as the `said Contract.).

Submissions

2. Learned counsel for the Petitioner submitted that the Petitioner is a partnership firm engaged in the business of construction of roads, and highways having its registered office at Anantapur, Andhra Pradesh. Respondent No.1 is National Highways & Infrastructure Development Corporation Ltd. (hereinafter referred to as 'NHIDCL'), a fully owned company of the Ministry of Road Transport & Highways, Government of India with its registered office in New Delhi.

3. It is submitted that the Petitioner was awarded the works of execution of said Contract vide Letter of Acceptance dated 19.07.2021 for a Contract Price of Rs.117,50,00,001/- excluding GST, with a construction period of 18 months commencing from the Appointed Date that was fixed as 25.08.2021.

4. It is stated that there are admitted defaults on part of the Respondent in the performance of its obligations under the contract including delay in providing the land and Right of Way (ROW) for carrying out the works under the contract, due to which the Petitioner was unable to perform its obligations under the contract within the original time schedule of the contract.

5. It is further submitted that despite the aforesaid hindrances that were not attributable to the Petitioner, the Petitioner achieved Milestones 1 and 2 mentioned in the contract before the Schedule date. However, due to the delay in providing ROW and due to unusual rain and delay in payments by the Respondent, the Petitioner by letter dated 14.10.2022 sought an extension of time 04.05.2023 from 25.02.2023 for completion of the awarded contract. Without considering the reasons stated in the said extension letter, the Respondent Authority Engineer recommended an extension of the contract till 02.04.2023. Despite the aforesaid, Respondent No. 1 failed to grant any extension to the Petitioner.

6. Learned counsel further stated that without considering the Petitioner's extension of time application, the Respondent on 12.01.2023 issued a Notice of Intention to Terminate the Contract under Clause 23.1 of the Contract Agreement. Petitioner by its letter dated 25.01.2023 filed a detailed response to the aforesaid notice wherein various defaults on the part of the Respondent and the various force majeure events were pointed out. Further, without considering the reply to the Notice and without giving any hearing to the Petitioner, Respondent No. 1 merely by repeating the allegations made in its Notice dated 12.03.2023 terminated the Contract on 07.03.2023. Further, such termination has taken place without even considering the Extension of Time Application of the Petitioner dated 14.10.2022.

7. It is therefore submitted that grave prejudice will be caused to the Petitioner if the effect of the Termination Notice is not stayed by this Hon'ble Court pending the invocation of Arbitration by the Petitioner. It is submitted that the Petitioner is therefore seeking interim protection by way of an Order of Stay on the effect and operation of the Termination letter dated 07.03.2023 issued by Respondent No. 1. It is submitted that despite the various delays by Respondent No. 1, the Petitioner had already achieved progress of 71% in milestone-3. It is fur