M/S Jai Ambey Construction Co. vs Union Of India & Ors.

$~105
* IN THE HIGH COURT OF DELHI AT NEW DELHI
%
Date of Decision: 20.04.2026
CONT.CAS(C) 1165/2025
+
M/S JAI AMBEY CONSTRUCTION CO. .....Petitioner
Through: Ms. Amrita Panda, Adv.
versus
UNION OF INDIA & ORS. .....Respondents
Through: Mr. Shashank Bajpai, CGSC along
with Ms. Aashna Mehra, Mr. Vatsal
Tripathi, Mr. Govind Singh Chouhan,
Advocates.
CORAM:
HON'BLE MR. JUSTICE SACHIN DATTA


SACHIN DATTA, J. (ORAL)

1. The present petition alleges wilful disobedience of the order dated
20.12.2024 passed in the arbitral proceedings between the parties in Case
Ref. No. DIAC/8230/04-24.
2. The operative directions in the order dated 20.12.2024 passed by the
learned Arbitrator, read as under:-

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3. It is evident from the above that (i) the respondents were directed not
to ban the petitioner herein; (ii) the said order was passed for the purpose of
ensuring that the petitioner’s participation in future tenders, notwithstanding
the cancellation of the subject contract between the parties, remains
unimpeded; (iii) the said observations were made in the context of the
remarks concerning the petitioner’s capability to handle more workload, as
referred to in the communication dated 05.09.2024.
4. Admittedly, no appeal against the aforesaid directions was filed by the
respondents. As such, undisputedly, the aforesaid directions continue to
operate.
5. The petitioner pointed out that despite the aforesaid, during the course
of evaluation of a tender, issued by the same department, the following
observations came to be made in respect of the bid of the petitioner:
“Not recommended being adverse remarks in WLR. Interim award
has been forwarded to E-in-C’s Br for CA (Def) opinion”
6. It is evident from the perusal of Annexure P-8 that the aforesaid
observations came to be made in the context of the same WLR of
September, 2024, which formed the basis of the aforesaid interim order
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passed by the learned Arbitrator.
7. It further transpires that in the aftermath thereof, in certain subsequent
WLR/s dated 27.05.2025, the same adverse remarks have been repeated
against the petitioner.
8. In the circumstances, it is evident that the respondents have not
complied with / adhered to the directions contained in the order dated
20.12.2024 passed by the learned Arbitrator.
9. The same tantamount to disobedience of the said order dated
20.12.2024, entailing action against the respondents under the Contempt of
Courts Act, 1971.
10. It is further noticed that in the counter affidavit filed on behalf of the
respondents, the following averments have been made:-

11. The aforesaid contention exacerbates the wilful disobedience on part

of the respondents, inasmuch as the respondents have conceded that they are
not implementing the interim award / order passed by the learned Arbitrator.
The same cannot be countenanced especially when the respondents have not
even assailed the said order in accordance with law.
12. In DDA v. Skipper Construction Co. (P) Ltd. , (1996) 4 SCC 622, the
Supreme Court held that it is incumbent upon this Court to pass appropriate
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order/s to ensure that the contemnors do not take advantage of the wilful
disobedience committed by them. The relevant extracts from the judgment
are as under:

18. The above principle has been applied even in the case of violation of
orders of injunction issued by civil courts. In Clarke v. Chadburn [(1985)
1 All ER 211] Sir Robert Megarry V-C observed:
“I need not cite authority for the proposition that it is of high
importance that orders of the court should be obeyed. Wilful
disobedience to an order of the court is punishable as a contempt
of court, and I feel no doubt that such disobedience may properly
be described as being illegal. If by such disobedience the persons
enjoined claim that they have validly effected some charge in the
rights and liabilities of others, I cannot see why it should be said
that although they are liable to penalties for contempt of court for
doing what they did, nevertheless those acts were validly done. Of
course, if an act is done, it is not undone merely by pointing out
that it was done in breach of the law. If a meeting is held in breach
of an injunction, it cannot be said that the meeting has not been
held. But the legal consequences of what has been done in breach
of the law may plainly be very much affected by the illegality. It
seems to me on principle that those who defy a prohibition ought
not to be able to claim that the fruits of their defiance are good,
and not tainted by the illegality that produced them.”
19. To the same effect are the decisions of the Madras and Calcutta High
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Courts in Century Flour Mills Ltd. v. S. Suppiah [AIR 1975 Mad 270 :
(1975) 2 MLJ 54] and Sujit Pal v. Prabir Kumar Sun [AIR 1986 Cal 220 :
(1986) 90 CWN 342] . In Century Flour Mills Ltd. [AIR 1975 Mad 270 :
(1975) 2 MLJ 54] it was held by a Full Bench of the Madras High Court
that where an act is done in violation of an order of stay or injunction, it is
the duty of the court, as a policy, to set the wrong right and not allow the
perpetuation of the wrongdoing. The inherent power of the court, it was
held, is not only available in such a case, but it is bound to exercise it to
undo the wrong in the interest of justice. That was a case where a meeting
was held contrary to an order of injunction. The Court refused to
recognise that the holding of the meeting is a legal one. It put back the
parties in the same position as they stood immediately prior to the service
of the interim order.”
13. In the circumstances, the respondents are restrained from making any
observations in the WLRs that may be issued qua the petitioner, in
derogation of the directions contained in the order dated 20.12.2024 passed
by the learned Arbitrator.
14. Further, it is clarified that the inter se controversy between the
petitioner and the respondents, which is the subject matter of arbitral
proceedings, shall not come in the way of the petitioner’s bids in respect of
tenders issued by the respondents.
15. The respondents are directed to purge their conduct and file a
compliance affidavit on the above lines within a period of four weeks from
today.
16. In the event of failure to do so, this Court shall be constrained to take
appropriate action against the respondents for committing wilful
disobedience of the order/s passed by this Court.
17. List for further consideration on 27.07.2026.

SACHIN DATTA, J
APRIL 20, 2026/r
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