Ms Fiberfill Engineers vs Union of India
- Court
- Uttarakhand High Court
UKHC010048802026
2026:UHC:9296-DB
HIGH COURT OF UTTARAKHAND AT NAINITAL
HON’BLE THE ACTING CHIEF JUSTICE SRI MANOJ KUMAR TIWARI
AND
HON’BLE SRI JUSTICE SUBHASH UPADHYAY
Appeal from Order No. 93 of 2026
13 October, 2026
M/s Fiberfill Engineers --Appellant
Versus
Union of India and Others. --Respondents
Counsel for the appellant: Mr. Ashutosh Thakral, learned counsel
The Court made the following:
JUDGMENT: (per Hon’ble The Acting Chief Justice Sri Manoj Kumar Tiwari)
This appeal from order is filed under Section 37
of the Arbitration and Conciliation Act 1996, read with
Section 13(1A) of the Commercial Courts Act 2015,
challenging the order dated 16.02.2026 passed by Learned
Additional District Judge, Commercial Court, Dehradun in
Arbitration Case No.100 of 2025. By the said order, petition
filed under Section 9 of Arbitration and Conciliation Act,
1996 (hereinafter referred to as “the Act”) by appellant,
was partly allowed.
2. In his petition under Section 9, appellant had
sought the following reliefs:
“A. Pass an ad-interim ex-parte injunction
restraining the Respondents No. 1, 2, and 3,
their officers, agents, servants, and anyone
acting on their behalf, from invoking, or taking
any steps whatsoever towards the forfeiture or
realization of the Performance Guarantee
1
UKHC010048802026
2026:UHC:9296-DB
furnished by the Petitioner as a Fixed Deposit
Receipt (FDR No. 316908 for Rs. 29,34,276/-,
issued by Union Bank of India, Safdarjung
Development Area, New Delhi);
B. Pass an ad-interim ex-parte injunction
restraining the Respondent No. 4 (Union Bank of
India) from encashing, paying, or releasing the
amount under the said Fixed Deposit Receipt
(FDR No. 316908 for Rs. 29,34,276/-) in favour
of Respondents No. 1, 2, or 3;
C. Pass an ad-interim ex-parte injunction staying
all further proceedings and any coercive action
(including but not limited to the invocation of the
Performance Guarantee) pursuant to the Show
Cause Notices dated 09.10.2025, 16.10.2025,
27.10.2025, and 03.11.2025, pending the
commencement and final adjudication of the
arbitral proceedings;
D. Confirm the ad-interim injunction passed in
terms of prayers (a), (b), and (c) after hearing
the parties;”
3. Perusal of the petition filed by appellant reveals
that appellant was apprehensive of punitive action under
Clause 3(xii) of the Agreement as employer had issued four
notices asking him to show-cause as to why the
performance guarantee amounting to ₹29,34,276/-
submitted by the appellant, be not encashed.
4. He further alleged in his petition that as per the
contract entered into between him and Central Public Works
Department, the construction work was to be completed
within 18 months from the date of commencement i.e.
24.03.2024, however, due to default, on the part of the
employer to provide a workable site and correct drawings,
2
UKHC010048802026
2026:UHC:9296-DB
work could not be completed and the contractor cannot be
held responsible for such delay.
5. Petition filed by appellant under Section 9 was
partly allowed by learned Commercial Court and the
employer was restrained from blacklisting the appellant for
a period of six months or till filing of application by him
under Section 17 of the Arbitration and Conciliation Act for
interim protection. However, the prayer made by appellant
for restraining the employer from encashing the FDR
deposited as performance guarantee was refused.
6. Appellant had sought injunction restraining the
employer from taking any steps for forfeiture or realization
of the performance guarantee deposited by him as FDR for
₹29,34,276/-. The order passed by learned Commercial
Court, Dehradun cannot be faulted. In proceedings under
Section 9 of the Arbitration and Conciliation Act, the
following reliefs can be granted:
a) preservation, interim custody or sale of goods
involved in arbitration;
b) securing the amount in dispute in arbitration;
c) granting interim injunctions or appointing
receivers.
d) any other relief deemed necessary by the
court to protect the subject-matter of the
dispute.
3
UKHC010048802026
2026:UHC:9296-DB
7. A party can approach the court for interim
measures before commencement of arbitration proceedings,
during the arbitration proceedings and after passing of the
arbitral award but before its execution.
8. Court’s interference under Section 9 is
discretionary and limited to granting interim measures.
Court should ensure that its order assists rather than hinder
the arbitration process. While passing an order under
Section 9 of the Act, court has to consider:
1) prima facie case;
2) balance of convenience; and
3) irreparable loss or injury.
9. Arbitral Tribunal has the power to grant interim
measures under Section 17 of the Act, however, if such
measures are deemed insufficient, the party may still
approach the court under Section 9 of the Act.
10. Under Section 9 of the Arbitration and
Conciliation Act 1996, court generally cannot grant interim
relief that runs contrary to the express terms of contract or
amounts to re-writing the agreement entered into between
the parties. An interim measure under Section 9 of the Act
is meant to protect the subject-matter of the dispute or
preserve the status quo , and not to alter or supersede clear
contractual terms.
4
UKHC010048802026
2026:UHC:9296-DB
11. Jurisdiction of the court under Section 9 of the
Act is identical to the jurisdiction of Civil Court granting
temporary injunction under Order 39 of the Code of Civil
Procedure. Interim relief can be granted only if the classic
tests of prima facie case, balance of convenience and
irreparable loss are met. The relief to be granted under
Section 9 of the Act is a protective relief and final relief
cannot be granted at the interim stage.
12. In para 2 of his petition filed before Commercial
Court, appellant mentioned that threat to encash
performance guarantee is given by referring to Clause 3(xii)
of the Contract entered into between him and CPWD. If
employer is entitled to invoke the performance guarantee
for breach of terms of the contract by the contractor, as per
the contract, then the court was justified in refusing
injunction against invocation of performance guarantee.
13. The dispute whether the contractor has
committed breach of terms and conditions of the contract
by not completing the construction work within the
stipulated time or the employer is responsible for the delay
by not providing clear site or drawings etc. can be decided
by the Arbitrator.
14. Invocation of performance guarantee by the
employer will not cause such loss to the appellant, which
cannot be compensated in terms of money. The dispute if
5
UKHC010048802026
2026:UHC:9296-DB
decided in favour of the appellant by the arbitrator, then
appellant will be entitled to the reliefs claimed by him,
including refund of the amount which he deposited as
performance guarantee.
15. For the aforesaid reasons, we do not find any
reason to interfere with the order passed by the
Commercial Court. The Appeal from Order is, therefore,
dismissed.
__________________________________
MANOJ KUMAR TIWARI, A.C.J.
___________________________
SUBHASH UPADHYAY, J.
Dt: 13.10.2026
ss
6