The petitioner company entered into a contract with the railways for carrying out certain 'civil work' in the year 2005. On 1.2.2008 the said agreement was terminated by the Railways. There were mutual allegations of default. Arbitration was sought by a letter of the petitioner dated 29.2.2008. A panel of three arbitrators entered upon reference on 25.7.2008. The arbitration is still pending.

2. In the meantime, the petitioner entered into four other contracts with the Railways which are dated 3.4.2008, 16.6.2008, 26.6.2008 and 12.11.2008 respectively. On 3.11.2009 Railways issued a notice directing withholding payment of Rs. 4,42,35,921/- from the running bills of the petitioner in respect of the aforesaid other four contracts. Apparently, this amount represents the claim of the Railways in respect of the contract of 2005.

3. It is common ground that the amount has been withheld from the running bills of other contracts by way of lien permissible under Clauses 52 and 52A of the General Conditions of the Contract (GCC for short) which were part of the 2005 agreement.

4. The petitioner relies upon a letter of the Railways dated 4.10.1990, a copy of which has been enclosed as Annexure to the writ petition. In that letter it has been stated that the implementation of the aforesaid Clause 52 of GCC causes problems because a contractor who had defaulted in respect of one contract, slows down the work of other undisputed contracts on the apprehension that his running bills of the other contracts would be withheld. The circular therefore requests incorporation of necessary amendment to Clause 52 of GCC.

5. However, it is not disputed that this request was not implemented because despite this circular of 1990, in the petitioner's agreement of 2005 Clause 52 of GCC remained as before.

6. Therefore, the circular at best represents a line of thinking or an idea which was not in fact implemented. Therefore, the Court has to go by the conditions of the Clause 52 as it stands, and not by the un implemented ideas.

7. The petitioner has relied upon another circular dated 12/16.5.2006 enclosed as annexure to the supplementary affidavit which indicates that subsequent to the petitioner's agreement, the Railways decided to incorporate in future agreements a clause requiring the contractors to furnish a "performance guarantee" to the extent of 5% of the contract value in the form of a bank guarantee which was enforceable in the event of default. This is a subsequent event and may be relevant for other future• agreements in which such a clause has been actually incorporated, but is not relevant for the agreement of 2005 which does not contain any such provision .for performance guarantee.

8. At this point, it may also be mentioned that despite the requirement of incorporating the condition regarding performance guarantee, the Railways have retained Clause 52 of the GCC in its original shape and form.

9. Before 'proceeding further with regard to the other submissions of the petitioner it may be clarified at this point that there are two distinct although consequential issues involved.

10. The first question involved is whether the Railways are or are not entitled to recover the amount of Rs. 4,42,35,921/- in respect of 2005 contract.

11. The second question is that if the Railways are entitled to recover the aforesaid amount whether the lien in respect of the said amount can be so exercised as to withhold payment of running bills of other independent agreements between the Railways and the petitioner.

12. So far the first question is concerned, that is directly covered by the arbitration proceedings and therefore, if the contention of the petitioner is that the said amount is not recoverable in respect of 2005 contract, the remedy of the petitioner lies in seeking injunction in the pending arbitral proceedings against such recovery. Therefore, I do not consider it proper for this Court to pre-empt the injunction jurisdiction of the arbitral proceeding