Full Judgment Text
$~45
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 13th DECEMBER, 2024
IN THE MATTER OF:
+ O.M.P.(I) (COMM.) 422/2024
INDO ENGINEERING PROJECT CORPORATION .....Petitioner
Through: Mr. Gaurav Gupta, Ms. Antara
Mishra Advocates
versus
NATIONAL HIGHWAYS AND INFRASTRUCTURE
DEVELOPMENT CORPORATION LIMITED INDIA
.....Respondent
Through: Mr. Yashpal Rangi, Advocate
CORAM:
HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD
JUDGMENT (ORAL)
I.A. 48172/2024 (Exemption)
Allowed, subject to all just exceptions.
O.M.P.(I) (COMM.) 422/2024 & I.A. 48171/2024
1. The Petitioner has approached this Court under Section 9 of the
Arbitration & Conciliation Act praying for quashing of a notice inviting bid
dated 09.10.2024 and the termination order dated 28.08.2024 and for other
reliefs.
2. The facts in brief as stated by the Petitioner in its petition are as
under:-
i. The Respondent/NHIDCL issued a notice inviting bid for
undertaking the construction of High Altitude Hill Road from
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By:SHAZAAD ZAKIR
Signing Date:20.12.2024
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O.M.P.(I) (COMM.) 422/2024 Page 1 of 7
Doginala to Gau from Km. 0.000 to Km. 15.320 in Upper
Subansiri District of the State of Arunachal Pradesh on
Engineering, Procurement and Construction (EPC) mode.
ii. It is stated that the Petitioner submitted its bid. The Petitioner's
bid was accepted and a letter of acceptance was issued to the
Petitioner on 21.12.2020 and the EPC Agreement was executed
between the parties, i.e., the Petitioner and Respondent on
19.02.2021.
iii. It is stated that the project was to commence on 04.03.2021. It
is stated that the Petitioner was not in a position to move its
men and material to the project site as there was no facility of
crossing over the bridge to the project site. It is stated that the
Respondent was informed that the Details Project Report in the
tender document did not analyze the approach to the project site
which included the bridge for crossing over the Subansiri river.
iv. It is stated that the non-availability of the bridge to the project
site resulted in delay. It is stated that there were several other
impediments because of which there was a delay in starting the
project. It is stated that a Supplementary Agreement dated
16.02.2022 was executed between the parties owing to massive
delay to the project and the absence of forest clearance. It is
also stated that there was opposition to the project by the locals.
It is stated that the land had not been properly acquired.
v. It is stated that despite all odds, the Petitioner completed the
first milestone of the project on 08.05.2023. It is stated that the
forest clearance was obtained only on 25.05.2023. It is stated
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Signing Date:20.12.2024
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O.M.P.(I) (COMM.) 422/2024 Page 2 of 7
that to the shock of the Petitioner, a notice of termination was
issued by the Respondent on 05.10.2023. It is stated that there
was communication between the parties. However, the contract
was terminated on 28.08.2024.
vi. The Petitioner has not approached the Court challenging the
said termination. It is stated that there were talks going on
between the parties and some action was done by the
Respondent.
vii. It is stated that on 09.10.2024, a fresh notice had been issued by
the Respondent for performing the balance work. It is stated
that the Petitioner approached this Court challenging the
termination order and the fresh notice inviting bid.
3. It is the contention of the learned Counsel for the Petitioner that the
termination is entirely malafide and the entire fault is at the side of the
Respondent for not addressing any issues causing delays.
4. It is stated that the Petitioner has already performed 20% of the
contract and the remaining work could not be proceeded ahead within the
stipulated time on account of the delays totally attributable to the
Respondent and due to COVID-19. It is stated that both the conditions were
beyond the control of the Petitioner and therefore the Petitioner could not
have been held responsible for the delay and the termination notice is bad.
5. The Petitioner challenged the notice inviting bid by filing W.P.(C)
No. 17004/2024 which was withdrawn by the Petitioner on 09.12.2024. The
said writ petition was filed on 07.12.2024 and the same was withdrawn on
09.12.2024.
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By:SHAZAAD ZAKIR
Signing Date:20.12.2024
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O.M.P.(I) (COMM.) 422/2024 Page 3 of 7
6. The agreement entered into between the parties contains an arbitration
clause. The Petitioner chose not to invoke the arbitration clause. In fact, the
Petitioner chose not to approach the Court under Section 9 of the Arbitration
& Conciliation Act at that point of time. The Petitioner chose to wait. The
notice inviting fresh bids was issued in the month of August, 2024 and
roughly after two months of issuance of notice inviting fresh bids by the
Respondent, W.P.(C) No. 17004/2024 was filed by the Petitioner, when
there was an alternate remedy available. The said petition was withdrawn by
the Petitioner to approach this Court under Section 9 of the Arbitration &
Conciliation Act.
7. Had there been a dispute, the Petitioner ought to have approached this
Court by filing a petition seeking appointment of an Arbitrator. The
Petitioner has not been vigilant in approaching the Court and has also filed
the writ petition after a period of two months.
8. It is well settled that in case there is inordinate delay on the part of the
party in approaching the Court for grant of any relief, then the courts do not
come to the rescue of such persons. In this case, the project is of national
importance and any stay in the notice inviting fresh bid which was issued on
09.10.2024 would rather cause irreparable loss and injury to the Respondent
in proceeding ahead with the project.
9. In view of the arbitration clause as contained in the agreement entered
into between the parties, the arbitrator alone can take a decision as to
whether the notice of termination was proper or not. This Court is of the
opinion that the balance of convenience and the irreparable loss would
actually lie in not granting a stay as sought for by the Petitioner.
10. The Apex Court in State of Madhya Pradesh v. Nandlal Jaiswal,
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Signing Date:20.12.2024
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O.M.P.(I) (COMM.) 422/2024 Page 4 of 7
( 1986) 4 SCC 566, even though the said judgment was in the context of
Article 226 of the Constitution of India, has observed as under:-
“ 24 . Now, it is well settled that the power of the High
Court to issue an appropriate writ under Article 226
of the Constitution is discretionary and the High
Court in the exercise of its discretion does not
ordinarily assist the tardy and the indolent or the
acquiescent and the lethargic. If there is inordinate
delay on the part of the petitioner in filing a writ
petition and such delay is not satisfactorily explained,
the High Court may decline to intervene and grant
relief in the exercise of its writ jurisdiction. The
evolution of this rule of laches or delay is premised
upon a number of factors. The High Court does not
ordinarily permit a belated resort to the extraordinary
remedy under the writ jurisdiction because it is likely
to cause confusion and public inconvenience and
bring in its train new injustices. The rights of third
parties may intervene and if the writ jurisdiction is
exercised on a writ petition filed after unreasonable
delay, it may have the effect of inflicting not only
hardship and inconvenience but also injustice on
third parties. When the writ jurisdiction of the High
Court is invoked, unexplained delay coupled with the
creation of third party rights in the meanwhile is an
important factor which always weighs with the High
Court in deciding whether or not to exercise such
jurisdiction. We do not think it necessary to burden
this judgment with reference to various decisions of
this Court where it has been emphasised time and
again that where there is inordinate and unexplained
delay and third party rights are created in the
intervening period, the High Court would decline to
interfere, even if the State action complained of is
unconstitutional or illegal. We may only mention in
the passing two decisions of this Court one in Ramana
Dayaram Shetty v. International Airport Authority of
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By:SHAZAAD ZAKIR
Signing Date:20.12.2024
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O.M.P.(I) (COMM.) 422/2024 Page 5 of 7
India [(1979) 3 SCC 489 : AIR 1979 SC 1628 : (1979)
3 SCR 1014] and the other in Ashok Kumar Mishra v.
Collector [(1980) 1 SCC 180 : AIR 1980 SC 112 :
(1980) 1 SCR 491] . We may point out that in R.D.
Shetty case, even though the State action was held to
be unconstitutional as being violative of Article 14 of
the Constitution, this Court refused to grant relief to
the petitioner on the ground that the writ petition had
been filed by the petitioner more than five months after
the acceptance of the tender of the fourth respondent
and during that period, the fourth respondent had
incurred considerable expenditure, aggregating to
about Rs 1.25 lakhs, in making arrangements for
putting up the restaurant and the snack bar . Of course,
this rule of laches or delay is not a rigid rule which
can be cast in a strait jacket formula, for there may
be cases where despite delay and creation of third
party rights the High Court may still in the exercise
of its discretion interfere and grant relief to the
petitioner. But, such cases where the demand of
justice is so compelling that the High Court would be
inclined to interfere in spite of delay or creation of
third party rights would by their very nature be few
and far between. Ultimately it would be a matter
within the discretion of the court; ex hypothesi every
discretion must be exercised fairly and justly so as to
promote justice and not to defeat it.”
(emphasis supplied)
11. If and when the Petitioner chooses to approach this Court to proceed
ahead for addressing its remedy by invoking arbitration, the arbitrator will
decide as to whether the termination was valid or not and if it is held that the
termination was not valid, the Petitioner can be compensated in monetary
terms.
12. The Petitioner has not therefore made out a prima facie case. In the
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Digitally Signed
By:SHAZAAD ZAKIR
Signing Date:20.12.2024
19:52:44
O.M.P.(I) (COMM.) 422/2024 Page 6 of 7
opinion of this Court, the delay in approaching this Court under Section 9 of
the Arbitration & Conciliation Act is fatal for this Court to pass orders under
Section 9 of the Arbitration & Conciliation Act in staying the termination
orders which were passed in the months of August, 2024, i.e., four months
ago and staying the notice inviting fresh bid, which was issued two months
ago. This Court is therefore not inclined to pass any interim orders in favour
of the Petitioner under Section 9 of the Arbitration & Conciliation Act.
13. It is made clear that this Court has not made any observation on the
merits of the case and all the observations made by this Court are only
limited to the issue as to whether this Court must exercise its jurisdiction
under Section 9 of the Arbitration & Conciliation Act and pass interim
orders in favour of the Petitioner before invoking arbitration.
14. The petition is dismissed along with pending application(s), if any.
SUBRAMONIUM PRASAD, J
DECEMBER 13, 2024
hsk
Signature Not Verified
Digitally Signed
By:SHAZAAD ZAKIR
Signing Date:20.12.2024
19:52:44
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