Sam Surveyors And Adjusters vs Container Corporation Of India Ltd
- Court
- Delhi High Court
$~81
* IN THE HIGH COURT OF DELHI AT NEW DELHI
# CNR No. DLHC010517772026
+ O.M.P.(I) (COMM.) 500/2026
SAM SURVEYORS AND ADJUSTERS .....Petitioner
Through: Mr. K. C. Dubey, Mr. Rishav
Dubey, Mr. Pawan Kumar, Mr.
Vineet Mishra, Ms. Uma
Tarafdar, Advs.
versus
CONTAINER CORPORATION OF INDIA LTD
.....Respondent
Through: None.
CORAM:
HON'BLE MR. JUSTICE OM PRAKASH SHUKLA
JUDGMENT(ORAL)
% 29.10.2026
1. The present petition under Section 9 of the Arbitration and
1
Conciliation Act, 1996 has been filed by the Petitioner, seeking interim
protection against the partial termination notice dated 13.10.2026
issued by the Respondent, whereby the Respondent, has alleged
repeated unsatisfactory performance of contractual obligations, and has
granted a final opportunity to the Petitioner to rectify the deficiencies
2
relating to Know Your Container Locations and inventory
management, which the Respondent proposed to take action in
accordance with the contract.
2
“KYCL” hereinafter
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Signed By:ANUBHAV
TRIPATHI
Signing Date:04.11.2026
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2. The Petitioner also seeks to restraint the respondent from making
any further forfeiture from the security deposit, effecting any recovery
on a risk-and-cost basis or taking any action for blacklisting or
debarment.
3. The material fact, as set out in the petition are that the
Respondent, awarded a contract to the Petitioner by Letter of
Acceptance dated 30.06.2023 for providing professional services
relating to the survey of containers/cargo and inventory management at
the Inland Container Depot, Whitefield, Bengaluru.
4. According to the petitioner, initially, the contract was awarded
for a period of four years, with a provision for extension by one further
year. The Petitioner was, inter alia, required to record the movement
and location of containers within the yard through handheld
terminals/Radio Data Terminals (RDTs), an activity referred to as
KYCL operations.
5. Learned counsel appearing for the Petitioner submits that the
alleged deficiencies in the performance of the contract are attributable
to the Respondent's failure to provide the infrastructure and functional
equipment necessary for carrying out KYCL operations.
6. It is submitted that the handheld devices supplied by the
Respondent were defective network connectivity within the yard was
inadequate, and proper yard mapping and markings had not been
provided. The Petitioner contends that these deficiencies on the
Respondent's part caused, or materially contributed to, the deficiencies
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Signed By:ANUBHAV
TRIPATHI
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now alleged against it.
7. It is further contended that the discrepancies in the records and
the delay in making entries cannot, therefore, be attributed to any
default on the part of the Petitioner.
8. Learned counsel for the petitioner further submits that the
Respondents has already made deductions from the Petitioner's running
bills on account of the alleged deficiencies and is now seeking to
terminate the contract on the basis of the same allegations.
9. It is also contended that the impugned notice is contrary to Clause
8.1 of Chapter IV of the tender conditions, as the Petitioner has not been
afforded a genuine and effective opportunity to rectify the alleged
defaults within the contractual period.
10. It is submitted that the proposed termination may result in
forfeiture of the security deposit, recovery on a risk-and-cost basis, and
debarment from future tenders. According to the Petitioner, such
consequences would cause serious financial and reputational prejudice
which cannot adequately be remedied at a later stage.
11. I have heard learned counsel for the Petitioner and perused the
material placed on record.
12. The relevant contractual provisions are contained in Chapter III
and Chapter IV of the tender conditions. Clause 2.2.1 of Chapter III,
insofar as relevant, reads as under:-
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Signed By:ANUBHAV
TRIPATHI
Signing Date:04.11.2026
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“2.2.1. Perform specialized inventory management
services in ICD/WFD as per requirement of CONCOR.
The works would include recording details of container
shifting within the yard by the equipments, loading and
unloading of containers from/to the rail wagons and other
Inventory Management in the yard. *CONCOR has
provided handheld terminals (HHTs) for feeding of
container locations synchronizing with the handling
being performed by the cranes/reach stackers. These
HHTs are to be used with care. CONCOR may upgrade or replace
these HHT's by a technologically more advanced device for this
purpose. On an average 4 to 8 moves per container are to be
recorded at ICD/WFD yard However, this may increase or decrease
and the contractor is required to provide services for recording each
and every move of the machine to ensure proper tracking of the
inventory through the HHTs/Devices. In case of non-availability of
the HHT's/Devices, the moves will be recorded manually in a data
sheet and subsequently updated in the computer system.
Equipment
Description
No. of
Equipment
working *
Reach Stackers
4
Empty Handlers
2
The number of Reach Stackers or Empty Handlers may increase *
or decrease. The contractor is required to deploy resources
accordingly. This shall not be a reason for dispute and no claims or
compensation shall be entertained by CONCOR in this regard.”
13. Clause 8.1 of Chapter IV, which governs termination of the
contract, reads as under:
“8.1 In the event of repeated instances of unsatisfactory service
or any failure at any time on the part of the contractor to comply
with the terms and provisions of this contract to the satisfaction of
CONCOR (who shall be the sole judge and whose decision shall be
final), it shall also be open to CONCOR to terminate this contract
by giving not less than 30 days’ notice in writing to that effect and
if the contractor, does not within 30 days after receipt of such
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Signed By:ANUBHAV
TRIPATHI
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notice, makes good his default, CONCOR shall be entitled to
terminate the contract as a whole or in part.”
14. Further, Clause 9 of Chapter IV provides as under:
“9.0 DEBARRING/BANNING OF BUSINESS DEALINGS
In the event of premature termination of contract in terms of
provisions of clause 8 above, CONCOR shall also be entitled to
Debar the contractor for participation in future tenders of CONCOR
or Ban future business dealings with them for a period as deemed
fit.”
15. Upon a plain reading of Clause 8.1, it is evident that the
Respondent has contractual powers to terminate the contract, either
wholly or partially, in the event of repeated unsatisfactory service or
noncompliance with contractual obligations. However, such power is
subject to the requirement of issuance of not less than 30 days' written
notice and an opportunity to the contractor to rectify the alleged defaults
within the stipulated period.
16. In the present case, the material placed on record indicates that
the Respondent issued several communications to the Petitioner
alleging deficiencies in the performance of KYCL operations.
17. In particular, notice dated 17.08.2026 expressly invoked Clause
8.1 of the tender conditions, identified deficiencies in the recording of
container movements and proposed partial termination with effect from
17.09.2026. The Petitioner submitted its response to the that notice on
26.08.2026.
18. Thereafter, a meeting between the parties was held on
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Signed By:ANUBHAV
TRIPATHI
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28.09.2026. Following that meeting, the Respondent issued the
impugned notice dated 13.10.2026, recording that deficiencies and
granting the petitioer a further opportunity to improve its performance
by 28.10.2026.
19. Thus, prima facie , it appears that the Respondent has invoked the
contractual mechanism prescribed under Clause 8.1 and afforded the
Petitioner opportunities to rectify the alleged deficiencies.
20. The Petitioner's objection that the impugned notice dated
13.10.2026 allowed only 15 days for rectification is a relevant
circumstance. However, that notice cannot be examined in isolation
from the earlier notice dated 17.08.2026, which expressly invoked
Clause 8.1 and proposed partial termination with effect from
17.09.2026, or from the subsequent meeting and correspondence
between the parties.
21. The earlier notice itself preceded the proposed date of partial
termination by more than 30 days. The impugned notice was issued
thereafter, following the Petitioner's response and the meeting between
the parties, and granted a further opportunity to improve performance.
The Respondent, therefore, did not rely solely on the 15 days period in
the impugned notice to initiate the contractual process.
22. On the material presently available, the sequence of
communications does not, prima facie , establish that the Respondent
bypassed the notice and opportunity-to-cure requirements of Clause
8.1.
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Signed By:ANUBHAV
TRIPATHI
Signing Date:04.11.2026
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23. This court exercising Section 9 jurisdiction cannot conduct an
merit based deep inquiry as to whether the Petitioner's explanations
were adequately considered and the alleged defaults were satisfactorily
rectified. It goes without saying that these matters require deeper
examination in appropriate .
24. The legal position concerning contracts which are determinable
in nature has been considered by the Hon'ble Supreme Court in K.S.
Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
3
Batil and Others , the Hon’ble Supreme Court discussed the
distinction between contracts which are terminable at will and those
which may be terminated at will and contracts which may be terminated
only upon the occurrence of specified events of default.
25. The Hon’ble Supreme Court recognised that a contract which
permits termination for cause, , particularly where termination is subject
to notice and an opportunity to cure the defaults, is not necessarily a
contract determinable in nature within the meaning of Section 14(d) of
the Specific Relief Act, 1963.
4
26. This Court in Roadway Solutions India Infra Limited vs NHAI ,
also considered the law relating to determinable contracts. The relevant
observations are reproduced below:
“This Court finds that although the respondent has been able to
highlight judgments where contracts with similar frameworks have
3
2025 INSC 1298
4
2026:DHC:6435
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Signed By:ANUBHAV
TRIPATHI
Signing Date:04.11.2026
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been regarded as determinable, however, on the common question
of what constitutes a contract in its nature “determinable” under
Section 14(d), the Supreme Court’s interpretation in Manjunath
(supra) binds all the judgments relied upon by the respondent,
wherein the Court has clarified the distinction between contracts
which are terminable at will and contracts which can be terminated
only upon the occurrence of specified events of default.
30. In Manjunath (supra) , the Supreme Court, while considering
the nature of determinability under Section 14(d), observed that
contracts inherently revocable or terminable without cause
would fall within the category of determinable contracts.
However, contracts which can be terminated only upon breach,
after issuance of notice and grant of an opportunity to cure, do
not become determinable merely because they contain a
termination clause. The relevant observations of the Apex Court in
this regard are reproduced below as the same call for a reading:
“64. In this backdrop, it would be useful to advert to the
classification set out in A. Murugan (supra) , wherein the
Madras High Court categorised contracts into five broad
classes depending on their ease of determinability. Out of
those, the first two, i.e., (i) contracts inherently revocable
such as licences and partnerships at will, and (ii) contracts
terminable unilaterally on a ‘without-cause’ basis, were held
to be determinable in nature. The remaining classes, namely,
(iii) contracts terminable for cause without provision for cure,
(iv) contracts terminable for cause with notice and
opportunity to cure, and (v) contracts without a termination
clause but terminable only for breach of a condition, were all
held not determinable in nature.
65. Further, as laid down in DLF Home (supra) , the
question whether a contract is in its nature determinable lies
in ascertaining whether the party against whom specific
performance is sought has the right to terminate the contract
even when the other party is ready and willing to perform.
This means if the contract cannot be terminated so long as the
other party stands willing to perform, it is not determinable in
its nature and would, in equity, be specifically enforceable.
The same reasoning was followed in Affordable
Infrastructure (supra) , where it was held that a contract
terminable for breach cannot merely for that reason be
regarded as determinable, otherwise, no contract could ever
be specifically enforced.”
(Emphasis supplied)
31. Applying the principle laid down in Manjunath (supra) , the
mere inclusion of Clause 23, which provides for termination upon
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Signed By:ANUBHAV
TRIPATHI
Signing Date:04.11.2026
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specified events of default and incorporates a cure and
representation mechanism, does not render the EPC Contract
inherently determinable within the meaning of Section 14(d) of the
Specific Relief Act, 1963. Termination is permissible only upon the
occurrence of defined causes and after compliance with the
prescribed cure and representation process. The decision in
Manjunath (supra) , therefore, squarely applies to the contract
between the parties”.
27. It could be understood that a distinction must be drawn between
contracts that can be terminated at will or without cause and contracts
that can be terminated only upon the occurrence of specified events of
default.
28. Applying the above principles to the present case, Clause 8.1
does not appear to confer an unrestricted right on the Respondent to
terminate the contract at will. It contemplates termination on account of
repeated unsatisfactory service or failure to comply with contractual
obligations, and it prescribes notice and an opportunity to cure.
29. Applying the same to the facts of the matter, this Court is of the
Prima facie view that Respondent has invoked the contractual
mechanism and followed the mechanism as envisaged by the governing
contract.
30. The Petitioner disputes the allegations of unsatisfactory
performance and has attributes the alleged deficiencies to the
Respondent's failure to provide adequate infrastructure and functional
equipment.
31. However, determining whether the RDT devices were defective,
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Signed By:ANUBHAV
TRIPATHI
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and whether network failures caused the discrepancies in KYCL
records, would necessarily involve examination of disputed questions
of fact and technical evidence. Even otherwise, nothing placed on
record demonstrates prima facie case in favour of petitioner.
32. In these circumstances, it is appropriate that such questions are
appropriately left to the Arbitral Tribunal and ought not to be
conclusively adjudicated in the present proceedings under Section 9 of
the Act.
33. The interim relief sought against partial termination would, in
substance, require the Respondent to continue engaging the Petitioner
for KYCL and inventory management services, notwithstanding the
Respondent's recorded dissatisfaction with the Petitioner's
performance. Such an order would go beyond preserving the subject
matter of the arbitration and would compel continuation of the
contractual arrangement at the interim stage.
34. The Petitioner has also not shown, on the material presently
available, why damages would be an inadequate remedy if the proposed
termination is ultimately found to be wrongful. Any loss arising from
an allegedly wrongful discontinuance of the contract may be claimed as
monetary compensation in the arbitral proceedings, subject to proof and
determination by the Arbitral Tribunal. No sufficient basis has been
shown for concluding that such a remedy would be inadequate.
35. Further, the Petitioner has not identified any specific
circumstance or material to demonstrate that refusal of the interim
protection sought would frustrate the arbitration, and render the arbitral
remedy ineffective, or otherwise cause prejudice which could not be
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Signed By:ANUBHAV
TRIPATHI
Signing Date:04.11.2026
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addressed in the arbitral proceedings. The requirement of urgent
protection of the subject matter of the arbitration has, therefore, not
been made out.
36. The balance of convenience also does not prima facie warrant a
direction compelling the continuation of the contractual services.
37. As regards the Petitioner's apprehension of blacklisting or
debarment, Clause 9 merely empowers the Respondent to consider such
action in the event of premature termination of the contract. The
impugned notice dated 13.10.2026 does not itself impose blacklisting
or debarment.
38. The settled law governing blacklisting recognises that such
action carries serious civil consequences and, therefore, stipulates that
the affected party be given adequate notice of the proposed action and
a meaningful opportunity to respond before any decision is taken..
39. The Petitioner's apprehension that such action may be taken in
the future does not, at this stage, provide an independent ground to
restrain the Respondent, from proceedings in accordance with the
contractual termination provisions. The possibility of a subsequent
decision to blacklist or debar the Petitioner must be distinguished from
an order actually imposing such a penalty
40. As of now, no order of blacklisting or debarment has been passed,
Additionally, nor has any communication directing forfeiture of
security or recovery of any quantified amount on a risk risk-and-cost
basis been placed before this Court.
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Signed By:ANUBHAV
TRIPATHI
Signing Date:04.11.2026
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41. In the absence of any such decision or direction, it is not
appropriate to examine the legality of those possible future measures at
this stage.
42. Those issues are left open for consideration in accordance with
law. In the event that the Respondent subsequently takes any such
action, the Petitioner shall be at liberty to avail itself of the remedies
available to it in law.
43. It is hoped that better sense and mutual understanding shall
prevail upon the parties.
44. In view of the aforesaid, this Court is of the opinion that no case
has been made out, at this stage, for grant of an interim injunction
restraining the Respondent from proceeding in accordance with the
impugned notice dated 13.10.2026.
45. The prayer for interim protection is accordingly declined.
46. It is clarified that the observations made in this order are prima
facie and are confined to the consideration of the present application for
interim relief. They shall not be treated as final findings on the merits
of the disputes and shall not prejudice the parties before the Arbitral
Tribunal, which shall decide the issues independently on the basis of
the material and evidence placed before it.
47. All rights and contentions of the parties are kept open, including
the Petitioner's right to challenge any subsequent coercive action in
appropriate proceedings.
Signature Not Verified
Signed By:ANUBHAV
TRIPATHI
Signing Date:04.11.2026
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48. The present petition is dismissed in the aforesaid terms.
OM PRAKASH SHUKLA, J
OCTOBER 29, 2026/at
Signature Not Verified
Signed By:ANUBHAV
TRIPATHI
Signing Date:04.11.2026
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