Page No.# 1/8 vs Assam Power Distribution Company ...
2025 Latest Caselaw 2428 Gua

Gauhati High Court

Page No.# 1/8 vs Assam Power Distribution Company ... on 29 January, 2025

Author: Devashis Baruah

Bench: Devashis Baruah

                                                                    Page No.# 1/8

GAHC010013942025




                                                              2025:GAU-AS:1031

                          THE GAUHATI HIGH COURT
   (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

                               Case No. : CRP/7/2025

            M/S. PCI CABLES INDUSTRIES PVT. LTD.
            A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956, HAVING
            ITS REGISTERED OFFICE AT OM COMPLEX, MONBER, SASTITALA,
            DANKUNI, HOOGHLY, WEST BENGAL- 712311, A JOINT VENTURE WITH
            M/S. A.K. INFRAPORJECTS PRIVATE LIMITED, A COMPANY
            INCORPORATED UNDER THE COMPANIES ACT, HAVING ITS REGISTERED
            ADDRESS AT- VILLAGE- BHADIWA, POST- AMBA, VARANASI, UTTAR
            PRADESH- 221104, REPRESENTED BY ITS BUSINESS HEAD-PROJECT
            DIVISION CUM POWER OF ATTORNEY HOLDER NAMELY MR. SOMNATH
            SADHUKHAN, AGED ABOUT 47 YEARS, SON OF SANKAR SADHUKHAN,
            RESIDENT OF-6/3/221, NETAJI LANE, BAIDYABATI(M), BAIDYABATI,
            HOOGLY, WEST BENGAL- 712222. BOTH CARRYING ON CONTACT
            BUSINESS AS JOINT VENTURE AGREEMENT DATED 08-07-2022, WITH
            ASSAM POWER DISTRIBUTION COMPANY LIMITED.



            VERSUS

            ASSAM POWER DISTRIBUTION COMPANY LIMITED
            CIN- U40109AS2003SGCOO7242,
            REPRESENTED BY THE CHIEF PROJECT MANAGER (PIU) HAVING ITS
            REGISTERED OFFICE AT 2ND FLOOR, O/O- THE CPM (PIU), BIJULEE
            BHAWAN, PALTAN BAZAR, GUWAHATI- 781001, ASSAM.



For the Petitioner(s)   : Mr. H. Gupta, Advocate


For the Respondent(s)   : Mr. K.P. Pathak, Standing Counsel
                                                                         Page No.# 2/8

Date of Hearing                     : 29.01.2025
Date of Judgment                    : 29.01.2025


                                  BEFORE
                   HONOURABLE MR. JUSTICE DEVASHIS BARUAH

                         JUDGMENT AND ORDER (ORAL)

Heard Mr. H. Gupta, the learned counsel appearing on behalf of the petitioner. Mr. K.P. Pathak appears on behalf of the respondent.

2. This is an application under Article 227 of the Constitution of India challenging the order dated 17.01.2025 passed by the learned Court of Additional District Judge No. 1, Kamrup (M), Guwahati (hereinafter referred to as "the learned Appellate Court) in Misc. Arbitration Appeal No. 01/2025 whereby the ad interim ex-parte order dated 03.01.2025 passed in Misc (Arbitration) No. 01/2025 by the learned Court of the Civil Judge (Senior Division) No.3, Kamrup (Metro) at Guwahati was set aside and quashed.

3. The question which arises in the instant proceedings is as to whether this Court should exercise its supervisory jurisdiction against an order passed by the learned Appellate Court who had exercised jurisdiction under Section 37 of the Arbitration and Conciliation Act, 1996 (for short, "the Act of 1996"). To ascertain the said, this Court would like to briefly deal with the facts leading to the filing of the instant proceedings.

4. The petitioner herein was awarded a contract by the respondent for "Construction of New 33/11 KV Sub-Stations, Construction of 33 KV and 11 KV Lines, 33 KV Terminal Equipments & 33 KV and 11 KV Crossings for Railways/River in Tinsukia Electrical Circle on a Turnkey Basis". Pursuant thereto, Page No.# 3/8

a contract agreement was entered into by and between the petitioner as well as the respondent. The petitioner herein was issued a notice of termination on 15.10.2024 by invoking Clause 42 of the General Conditions of Contract (for short, "GCC"). In response thereto, the petitioner wrote a letter dated 21.10.2024 assuring that there would be significant progress within 3 to 4 months and the contract work would be completed within the agreed date for completion of the project. At this stage, it is relevant to take note of that the completion date was 20.02.2025. Be that as it may, on 23.12.2024, the respondent terminated the contract vide an order bearing No.58. The petitioner thereupon being aggrieved, by the termination order issued a letter dated 31.12.2024 requesting for Appointment of a Dispute Board in terms of Clause 45.1 of Section 7 of the GCC.

5. While the said referral to the Dispute Board was pending, the petitioner also preferred an application under Section 9 of the Act of 1996 seeking interim measures. The said application being taken up as a commercial litigation was endorsed to the learned Court of the Civil Judge (Senior Division) No. 3, Kamrup (M) at Guwahati (hereinafter referred to as "Section 9 Court") and was registered and numbered as Misc. (Arbitration) Case No. 01/2025. At this stage, it is further relevant to mention that the application under Section 9 of the Act of 1996 was filed on 30.12.2024. The petitioner thereafter received an e-mail dated 02.01.2025 from the respondent regarding invocation and forfeiture of the Bank Guarantee submitted by the petitioner at the time of entering into the Contract Agreement. The said application under Section 9 of the Act of 1996 was moved on 03.01.2025. Be that as it may, the petitioner did neither amend the application filed under Section 9 of the Act of 1996 to insert the cause of action pertaining to the invocation of the Bank Guarantee nor did seek any Page No.# 4/8

interim measures in respect to the email dated 02.01.2025.

6. The learned Section 9 Court vide an order dated 03.01.2025 passed an ex- parte ad-interim injunction restraining the respondent herein, their men, agents from giving effect to the termination Order No. 58 dated 23.12.2024 till the next date. The next date was fixed on 17.02.2025.

7. The respondent thereupon preferred an Appeal under Section 37 of the Act of 1996 before the learned Court of the Additional District Judge No. 1, Kamrup (M) at Guwahati, which was registered and numbered as Misc. Arbitration Appeal Number 01/2025, challenging the order dated 03.01.2025 on various grounds. The said Appeal was allowed vide the impugned order dated 17.01.2025 and it is under such circumstances, the present application has been filed under Article 227 of the Constitution of India.

8. Mr. H. Gupta, the learned counsel appearing on behalf of the petitioner submitted that the learned Appellate Court could not have exercised its jurisdiction against an ex-parte ad-interim order in terms with Section 37 of the Act of 1996. He submitted that it is only against a final order passed in terms with Section 9 of the Act of 1996; an Appeal lies under Section 37 of the Act of 1996. The learned counsel further submitted that the learned Appellate Court had further gone into merits and had arrived at a conclusion that the contract in question was determinable in nature and as such, the Section 9 Court could not have granted an injunction in view of Section 41 of the Specific Relief Act. The learned counsel submitted that although the contract in question was determinable but that was subject to fulfillment of certain conditions and in that regard, had referred to Clause 42.2.2 of the GCC which mandates that a notice Page No.# 5/8

has to be given of 14 days, and then only the termination can be carried out. He further submitted that pursuant to the order passed on 03.01.2025 whereby the termination was stayed by the Section 9 Court, the Bank who had issued the Bank Guarantee was duly communicated and the concerned Bank did not permit the invocation of the Bank Guarantee. He further submitted that subsequent to the order being passed on 17.01.2025 which has been impugned in the instant proceedings, the Bank Guarantee had already been invoked. Summing up, the learned counsel submitted that the learned Appellate Court did not have the jurisdiction to exercise its appellate powers in respect to an ad-interim ex-parte injunction and further the findings so arrived at have already made the proceedings under Section 9 filed infructuous. He therefore submitted that this Court should exercise its supervisory jurisdiction under Article 227 of the Constitution of India.

9. Mr. K.P. Pathak, the learned Standing Counsel appearing on behalf of the respondent per contra submitted that the contract in question was determinable in nature as would appear from Clause 42 of the GCC itself. He further submitted that the petitioner was issued a notice on 15.10.2024 to carry out necessary progress inasmuch as the progress so made by the petitioner was inadequate. The learned Standing Counsel further submitted that taking into account that no substantive progress was made and the completion date was coming on 20.02.2025, the respondent had terminated the contract vide an order dated 23.12.2024. He therefore submitted that when the contract is determinable in nature, no injunction can be granted in terms with the mandate of Section 41 read with Section 14 of the Specific Relief Act, 1963 which the learned Section 9 Court failed to take note of. He further submitted that it is unheard of that the termination of a contract can be stayed under Section 9 of Page No.# 6/8

the Act of 1996 that too by way of an ex-parte ad-interim order. The learned Standing Counsel further submitted that the objection taken as regards the maintainability of Appeal under Section 37 of the Act of 1996 is no longer res integra as the learned Division Bench of the Karnataka High Court in the case of M/S KLR Group Enterprises Vs. Madhu H.V. and Others reported in (2024) SCC

OnLine Kar 65 had categorically held that against an ad-interim ex-parte order

passed in a Section 9 proceedings, an Appeal under Section 37 is maintainable.

10. This Court duly heard the learned counsels appearing on behalf of the parties and duly given its anxious consideration.

11. This Court at the outset expresses shock and surprise at the order dated 03.01.2025 whereby the learned Court of the Civil Judge (Senior Division) No. 3, Kamrup (M) at Guwahati had passed an ex-parte order whereby a termination of a contract was stayed. It cannot be visualized as to how a contract which has already been terminated can be stayed that too by way of an ad-interim ex- parte injunction. On this aspect alone, the interference so made by the learned Appellate Court vide its order dated 17.01.2025 does not call for any interference. Further to that, this Court had duly taken note of that the petitioner herein was issued a notice on 15.10.2024 as progress of the contract work was inadequate as alleged in the said notice. The petitioner though submitted a reply on 21.10.2024, thereby submitting that progress would be made but as per the respondent even then also there was no substantial progress, for which the termination order was passed on 23.12.2024. On the basis thereof, and taking into account Clause 42.2.2, this Court is of the opinion that the observations so made by the learned Appellate Court dated 17.01.2025 that the contract in question was determinable in nature do not call for any Page No.# 7/8

interference.

12. This Court upon perusing the reasoning given by the learned Division Bench of the Karnataka High Court in the case of M/S KLR Group Enterprises (supra) is in agreement to the proposition of law observed therein to the effect

that in limited circumstances as stated in paragraph 29 of the judgment, an appeal is maintainable under Section 37 of the Act of 1996 against an order granting or refusing ex-parte interim measures. Paragraph 29 of the said judgment is quoted herein below:

"29. Conclusions on the questions of law.

(a) The appeal under Section 37 of the Arbitration and Conciliation Act, 1996 is maintainable against an order granting or refusing ex-parte interim measure under Section 9 of the Act, 1996, even if the Section 9 application is filed before the Commercial Court, as defined under Commercial Courts Act, 2015.

(b) As a corollary, appeal under Section 37 of the Act, 1996 is maintainable against an order granting or refusing ex-parte interim measure under Section 9 of the Act, 1996, if the Section 9 application is filed before the Court exercising jurisdiction under the Act, 1996.

(c) Though the appeal under Section 37 of the Act, 1996 is maintainable against the order refusing 'ex-parte' measure, the scope of interference in such appeal is limited as the Appellate Court is only required to consider whether consideration of prayer of ex-parte interim measure can be deferred till the appearance of the respondent.

Page No.# 8/8

(d) In an appeal under Section 37 of the Act, 1996 against the order granting 'ex-parte' measure, the appeal may be entertained only in exceptional cases as the aggrieved party will have an efficacious remedy of moving the same Court which passed the order, to vacate the 'ex-parte' order.

(e) Law laid down in Symphony Services Corporation (India) Private Limited, Bangalore v. Sudip Bhattacharjee, (2008) 2 KLJ 24 stands overruled."

13. In that view of the matter, this Court does not find this to be a fit case for exercise of jurisdiction under Article 227 of the Constitution of India, for which, the instant petition stands dismissed.

14. Be that as it may, this Court, however, observes that the observations so made by the learned Appellate Court in the order dated 17.01.2025 as well as the observations so made herein shall only be construed to be in respect to an adjudication of the Section 9 application. The said observations shall not prejudice either of the parties in any arbitration proceedings so ensured between the parties or before any other redressal mechanism approached by either of the parties.

JUDGE

Comparing Assistant