Delhi High Court
M/S Natconn Engineering Private ... vs Prabhjeet Singh & Ors on 31 July, 2018
$~4 & 5
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Order: July 31, 2018
+ CONT.CAS(C) 928/2015
M/S NATCONN ENGINEERING PRIVATE LIMITED
..... Petitioner
versus
PRABHJEET SINGH & ORS
..... Respondent
+ FAO(OS) 526/2015
M/S JITF WATER INFRASTRUCTURE LTD
..... Appellant
versus
M/S NATCONN ENGINEERING PVT LTD (NEPT)
..... Respondent
Counsel for the petitioner:
Mr. Nilava Bandyopadhyay, Mr. Vijaya Singh,
Advocates in Item 5
Counsel for the respondent:
Mr. A. Mishra, Advocate for respondent No. 1.
Mr. V.K.Shukla, Advocate for respondent No. 2 -
State of MP.
Mr. Nilava Bandyopadhyay, Mr. Vijaya Singh,
Advocates in Item 4
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE A. K. CHAWLA
ORDER
%
S. RAVINDRA BHAT, J. (ORAL)
1. The appellant's grievance is with respect to the order of the
learned Single Judge under Section 9 of the Arbitration and
Conciliation Act (hereinafter referred to as "Arbitration Act"),
thereby, directing it to maintain status quo with respect to the
equipment of the respondent [The contractor-M/s. Netconn
Engineering Pvt. Ltd. (NEPT)], [hereinafter referred to as
"NETCONN"). The order directed the appellant restraining it to
appoint the new contractor and open Escrow account with IDBI Bank.
After notice was issued, in the appeal, the respondent Netconn
Engineering Pvt. Ltd. approached this court in Contempt Proceedings
(Cont. Case No.928/2015) alleging that the learned Single Judge's
order is wilfully flouted. It is alleged that the appellant - JITF Water
Infrastructure Ltd. (hereinafter referred to as JITF), had appointed
another contractor, contravening the court's order and decided not to
comply with the order with respect to the ESCROW account.
2. During the course of hearing of these two matters, it transpired
that an arbitration proceeding between the parties is initiated.
Apparently, the appointment of the arbitrator was challenged by the
NETCONN, which appears to have approached the Hon'ble Supreme
Court.
3. In this appeal (FAO(OS) No. 526/2015), this court, on
17.09.2015 directed as follows: -
Issue notice, returnable on 09.10.2015.
In the meanwhile, while the appellant shall maintain
status quo with respect to the respondent's equipment
lying at the site, we are informed by the learned counsel
for the appellant that the new contractors have already
been appointed on 25th, 28th and 30th August, 2015 prior
to the impugned order which was passed on 04.09.2015.
Therefore, the direction given in the impugned order with
respect to the appointment of a new contractor will not
be operative. Insofar as the Escrow account is
concerned, the learned counsel for the appellant states
that status quo will be maintained till the next date of
hearing. There shall also be stay of operation of the
direction contained in paragraph 9 of the impugned
order. For the sake of clarity, paragraph 9 is extracted
below:
"The competent officers of the parties shall remain
present in Court on the next date of hearing along
with all relevant documents relating to this case
within their power and possession."
4. Learned counsel for the NETCONN urges that this court should
take a serious view of the directions with respect to the appointment
of new contractor. It is stated contrary to the submissions made in the
court that the new contractor was only issued a letter of intent and no
work order. It is also stated that till date, the NETCONN does not
have the exact details of the fact as to what amount is maintained in
the Escrow account and as to when the Escrow account was changed.
5. We are of the opinion that since the question of correctness of
the termination of the contract would be the subject matter of the
arbitration proceedings, for which the parties have in fact, sought
recourse in accordance with the law, it would not be appropriate for
this court to examine the issue whether such action by JITF was
lawful. The claim in such proceedings would obviously be for
compensation. In these circumstances, the directions given by the
learned Single Judge to maintain status quo vis-a-vis the contract
cannot be sustained, because of section 41(e) and 14(1)(a) of the
Specific Relief Act. As regards the ESCROW account, this court is of
the opinion that the respondent - JITF in the contempt proceedings,
should furnish these details, alongwith the compliance affidavit filed
in OMP 498/2015, which is said to be pending, within two weeks.
6. With aforesaid observations, the FAO(OS) No. 526/2015and
Cont. Cas (C) 928/2015 are accordingly disposed of.
S. RAVINDRA BHAT, J
A. K. CHAWLA, J
JULY 31, 2018
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