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2004 Supreme(Gau) 432

IN THE HIGH COURT OF GAUHATI
Aftab H. Saikia, J.
Archcon and Ors.
Vs.
Sewda Const. Co. and Ors.
W.P. (C) No. 4042 of 2004
Decided On: 29.06.2004

Advocates:
Advocate Appeared:
For Appellant/Petitioner/Plaintiff: P.K. Goswami, P. Khataniar, A. Das and M. Bordoloi, Advs.
For Respondents/Defendant: P.K. Roy Choudhury, N.D. Nath, N.G. Kundu and A. Khan, Advs.

The judgment establishes that Section 9 of the Arbitration and Conciliation Act, 1996, does not apply to contracts determinable under the Specific Relief Act, and the principles of injunction must be met for the grant of interim relief.

Headnote:

Arbitration - Construction Contract - Arbitration and Conciliation Act, 1996, Section 9

Fact of the Case:

The petitioner, a construction firm, terminated a construction contract due to the respondent's use of substandard materials and poor quality of work. The respondents sought an interim injunction under Section 9 of the Arbitration and Conciliation Act, 1996, which was granted by the District Judge. The petitioner challenged the legality of the order.

Finding of the Court:

The court found that the contract was terminated before the interim injunction was granted, and no arbitral proceeding had been initiated by both parties as required by the agreement. The court also held that Section 9 of the Act does not apply to contracts determinable under the Specific Relief Act, and the principles of injunction were not met in this case.

Issues: The issues involved the legality of the interim injunction granted under Section 9 of the Arbitration and Conciliation Act, 1996, and the applicability of the Act to the construction contract.

Ratio Decidendi: The court held that the interim injunction was not justified as the contract had already been terminated, no arbitral proceeding had been initiated, and the principles of injunction were not met. The court also found that Section 9 of the Act does not apply to contracts determinable under the Specific Relief Act.

Final Decision: The court quashed and set aside the impugned order, allowing the writ petition.

JUDGMENT

A.H. Saikia, J.

1. Heard Mr. P.K. Goswami, learned senior counsel assisted by Mr. P. Khataniar, learned counsel for the petitioner. Also heard Mr. P.K. Roy Choudhury, learned counsel for the respondents.

2. Considering the urgency and nature of controversy involved in this case and also on consent of the learned counsel for the parties, this court purposes to dispose of this writ application at the stage of motion hearing itself.

3. The correctness and legality of the order dated 8.6.2004 passed by the learned District Judge, Kamrup, Guwahati, in Misc. Case No. 313/ 04 arising out of Misc. (Arb) Case no. 288/04 has been assailed in this writ application preferred under Articles 226 and 227 of the Constitution of India.

4. At the very outset, a question has been raised as regards the maintainability of this writ petition on the ground that against the order impugned appeal lies before this court under Section 37 of the Arbitration and Conciliation Act, 1996 (for short "the Act") and the same being the alternative remedy available to the petitioner, the present petition under Article 226 read with Article 227 of the Constitution of India is not maintainable. Undoubtedly, against an order under Section 9 of the Act, a statutory appeal is maintainable under Section 37 of the Act but it cannot be said that the same will be a bar for invoking the power under Article 226 read with Article 227 of the Constitution of India. If the order suffers from basic illegality or passed in contravention of the established principles of law, the High Court, in exercising its power under Articles 226 and 227, can interfere with such order. Though alternative remedy is available to the petitioner by way of appeal against the impugned order, the said remedy should not only be an adequate and efficacious but also comprehensive one than the one under Articles 226 and 227 in the context of the fact situation of the case and hence, the High Court, being a writ court under Article 226 and having conferred with a power of superintendence under Article 227, has the absolute authority to extend its judicial majesty to the courts below if it is shown that grave injustice has been done to party. The power of Article 227 of the Constitution is not confined to administrative superintendence only but also includes the power of judicial review over all courts and tribunals even where no application under such provision lies to the High Court under ordinary law. This power involves a duty on the High Court to keep the inferior Courts and Tribunals within the bounds of their authority and to see that they do what their duty requires and that they do in the legal manner. In that view of the matter, I hold that despite having an alternative remedy, not being adequate and efficacious in the given facts and circumstances of the case, this application under Articles 226 and 227 of the Constitution of India is maintainable.

5. The brief facts leading to the filing of this petition as emerged from the pleadings of the parties, are that the petitioner No. 1, a Registered Partnership Firm, having its principal place of business at MC Road, Barowari, Uazanbazar, Guwahati, has been engaged in construction of building real estate development etc. wherein the petitioner Nos. 2 and 3 are the Partners. The petitioners entered into an agreement with the respondents being a Registered Partnership Firm on 11.9.2003, inter alia, on such terms and conditions, engaging the respondents for the purpose of construction and erection of a multistoried building in the name and style of "Surya Enclave" at a cost of Rs. 2.65 crores to be paid b the petitioners. As per the agreement, the said construction had to be completed within a period of 24 months from the date of agreement i.e. 11.9.2003 and the respondents would have to purchase the raw materials, i.e., cement, iron, sand, stone cheaps etc. in other words, housing construction materials. Though the agreement was executed on 11.9.2003,




















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