M/S Jialall Kishorilall Pvt. Ltd. vs Municipal Corporation Of Delhi
2009 Latest Caselaw 3627 Del

*           IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                 Date of Reserve: August 19, 2009
                                                Date of Order: September 08, 2009
+OMP 330/2009
%                                                                       08.09.2009
    M/s Jialall Kishorilall Pvt. Ltd.                            ...Petitioner
    Through: Mr. D. Moitra, Advocate

       Versus

       Municipal Corporation of Delhi                            ...Respondent
       Through: Ms. Mini Pushkarna, Advocate

       JUSTICE SHIV NARAYAN DHINGRA

1.     Whether reporters of local papers may be allowed to see the judgment?

2.     To be referred to the reporter or not?

3.     Whether judgment should be reported in Digest?


       JUDGMENT

1. The petitioner approached this Court on receipt of letter dated 28 th

May, 2009 from respondent rescinding the contract between petitioner and

respondent for construction of commercial Nalla at Gautam Nagar behind

Indian Oil Building with a prayer that the Court should stay the operation of

the letter and permit the petitioner to complete the work by August, 2009.

2. When notice of petition was served upon respondent, respondent took

a plea that there was no arbitration agreement between the parties and the

petition was not maintainable while petitioner took the stand that there exists

an arbitration agreement inter se parties. Both parties were asked to file their

respective affidavits with supporting documents.

3. A perusal of documents would show that the standard contract

Performa, which is supplied to all the contractors, contained an arbitration

OMP No.330 of 2009 M/s Jialall Kishorilall Pvt. Ltd. vs. MCD Page 1 Of 3 clause. However, this arbitration clause was scored off in the original contract

available with the respondent. The petitioner contended that this scoring off

was done later on. The petitioner had signed on each page of the contract at

the bottom and there were no specific signature of the petitioner at the

arbitration clause having been scored off. Respondent argued that the

Commissioner of MCD vide its office order dated 11th December 2006 had

ordered that the arbitration clause in various contracts forms being adopted

by MCD should be deleted with immediate effect. Pursuant to this office

order, the arbitration clause of this agreement between the parties dated 12th

December 2007 was also deleted and the contractor was very well aware of

this fact. The affidavit of Superintending Engineer filed on behalf of

respondent stated that at the time when tenders were opened he was present

and when the work was awarded in favour of contractor, the agreement was

signed in his office and the arbitration clause was specifically scored off and

the signatures of the contractor at the bottom of scored off clause were

obtained in token of its scoring. However, the counter affidavit filed by the

contractor (the petitioner herein) is contrary to the assertions made by the

Superintending Engineer and it is asserted that the signatures of petitioner

were affixed on the contract prior to the deletion of the arbitration clause and

the clause was deleted later on.

4. In my view, this controversy is unnecessary for disposal of this petition.

Even if it is presumed that there was an arbitration clause, the relief sought

by the petitioner by way of present petition cannot be granted. The petitioner

has sought cancellation of the contract done by respondent be stayed under

Section 9 of Arbitration & Conciliation Act, 1996.

5. This Court in Lt. Col. (retd). K.S. Ahluwalia v. Indraprastha Gat Ltd. 2009

OMP No.330 of 2009 M/s Jialall Kishorilall Pvt. Ltd. vs. MCD Page 2 Of 3 3 Arbitration Law Reporter 186(Delhi) observed that where a contract

between the parties stands terminated, the same cannot be kept alive by

virtue of Section 9 of Arbitration & Conciliation Act, 1996. It was not within the

jurisdiction of the Court to renew a contract between the parties or to extend

the contract between the parties. If a contract was a terminable contract and

has been terminated by a party, the opposite party has a claim to the

damages suffered by it and the same can be considered by the arbitrator

only. This Court in M/s Excel Generators Pvt. Ltd. v. IJM Corporation Berhad

OMP 241 of 2009 decided on 13th May 2009 had also observed that where a

contract is terminated or foreclosed interim relief under Section 9 cannot be

granted for specific performance of such a contract. In all those cases where

monetary damages can compensate the breach of the contract, the Court

cannot insist upon a party that the contract should be specifically performed.

Termination of a contract is one of the facets of commercial law and if a party

is agitated that the contract was wrongly terminated, the remedy lies in

claiming damages. The party cannot insist upon that the contract should be

specifically performed.

6. In view of my foregoing discussion, I find that the present

application/petition made by petitioner seeking a relief to the effect that

termination of the contract should be stayed and he be permitted to

specifically perform the contract, is not maintainable and is liable to be

dismissed. The petition is hereby dismissed. However, the order passed by

this Court is without prejudice to the rights and contentions of MCD about non

existence of the arbitration clause.

September 08, 2009                                           SHIV NARAYAN DHINGRA J.
rd

OMP No.330 of 2009        M/s Jialall Kishorilall Pvt. Ltd. vs. MCD                     Page 3 Of 3