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2025 Supreme(Gau) 1899
THE GAUHATI HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
DEVASHIS BARUAH, J.
Ms Latala Construction Co. - Appellant
Vs.
The Union Of India And Ors. - Respondent
WP(C) No. 6396 of 2025
Decided On : 12-11-2025
Advocate Appeared:
For the Appellant : :Ms. M. Sharma, Advocate
For the Respondent: Mr. H. Gupta, CGC
The availability of arbitration provisions precludes the exercise of writ jurisdiction when interim relief is sought, emphasizing adherence to contractual dispute resolution mechanisms.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 9 and 17 - Termination of contract - Challenge to retrospective termination notice under specific contract clauses - The petition involving the challenge to the validity of the termination was dismissed, on the grounds that arbitration provisions provide adequate safeguards for interim relief. (Paras 3, 4, 6, 7, 8)
(B) Writ Jurisdiction - The court refrains from intervening where arbitration remedies exist, emphasizing the importance of following contractual and procedural provisions before resorting to writ petitions. (Paras 7, 8)
Facts of the case:
The petitioner contested a termination notice for alleged inadequate performance, citing a Supreme Court order impacting supply capabilities. The contract was rescinded based on specific provisions due to inadequate work completion.
Findings of Court:
The court found that the petitioner has adequate recourse through arbitration rather than the writ jurisdiction, thus the petition was dismissed.
Issues: The issues included the legitimacy of the termination and the appropriateness of the writ jurisdiction when alternative legal remedies exist.
Ratio Decidendi: The court ruled that where arbitration provisions are in place, they should be availed instead of seeking immediate writ relief, underscoring the preference for arbitration as a dispute resolution method.
Result: Writ petition dismissed.
| Table of Content |
|---|
| 1. petitioner's request for interim reliefs. (Para 2 , 3) |
| 2. termination notice details and petitioner's defense. (Para 4 , 5) |
| 3. court's reasoning on jurisdiction and arbitration act. (Para 6 , 7) |
| 4. writ petition dismissed; access to arbitration for interim orders. (Para 8 , 9 , 10) |
JUDGMENT AND ORDER :
DEVASHIS BARUAH, J.
Heard Ms. M. Sharma, the learned counsel appearing on behalf of the Petitioner and Mr. H. Gupta, the learned CGC appearing on behalf of the Respondent Nos. 1 and 2.
2. The present petition is filed challenging the termination notice dated 04/05.09.2025; seeking directions upon the Respondents to refund the Earnest Money Deposit, the Security Deposit as well as the Bank Guarantee. Further to that, the Petitioner also sought for a relief that the Respondents be also directed to permit the Petitioner to resume the balance work after the withdrawal of the mining ban in accordance with the binding directions of the Supreme Court.
3. It is also seen that in the instant writ petition, the Petitioner has sought for the certain interim reliefs. The same being relevant are reproduced herein under:
“(i) Stay the operation and implementation of the impugned termination notice dated 04/05.09.2025 issued by the Respondent No.2, i.e., the Senior Divisional Engineer/I, Lumding Division, N.F. Railway, pending conclusion of the arbitration proceedings initiated between the parties;
(ii) Restrain the Respondents from taking any coercive or adverse action against the Petitioner, including but not limited to forfeiture of Earnest Money Deposit (EMD), Security Deposit, or encashment of the Performance/Bank Guarantee;
(iii) Restrain the Respondents from blacklisting or debarring the Petitioner from participating in the balance work or future contracts related to the subject matter of the present dispute, pending final adjudication of this Writ Petition; and
(iv) May pass such other or further interim order(s) or direction(s) as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case.”
4. It is relevant to observe that in the impugned termination notice dated 04/05.09.2025, it was mentioned that the Letter of Acceptance was issued on 20.11.2024 with a completion period of 12 months and the performance was found to be wholly inadequate. It was also mentioned that the Petitioner had supplied only 1535 cum of ballast since the last loading done on 28.02.2025 resulting in issuance of 7 days notice and 48 hours notice on 09.07.2025 and 24.07.2025 respectively. Under such circumstances, in exercise of powers under Clause 62 of the Standard General Conditions of the Contract, the contract with the Petitioner was rescinded with the stipulation that the balance work under the contract would be carried out independently without the participation of the Petitioner. Further to that, the Security Deposit would be forfeited and the Performance Guarantee would also be encashed.
5. It is the case of the Petitioner that the Petitioner was not in a position to make the supply in view of certain orders being passed by the Supreme Court and as such, the said termination was not in accordance with law.
6. At this stage, this Court finds it very pertinent to take note of that the power to rescind the contract is provided in Clause 62((2) of the Standard General Conditions of Contract and the termination order appears to be made in pursuance to the power exercised under Clause 62(2) of the said Standard General Conditions of Contract.
7. This Court further finds it relevant to take note of Clause 64 of the Standard General Conditions of Contract which is an Arbitration Clause. The question therefore arises as to whether this Court should at all exercise the jurisdiction that too when the Petitioner had itself approached for initiation of arbitration proceedings and more particularly when the interim relief so sought for is specific that these interim directions were to be passed during the pendency of the arbitration proce
