- (1.)The challenge by means of these first appeals under Section 37 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as "the Act") is to the impugned orders of the Court below dated 21.2.2011 and 5.2.2011. By the impugned orders, the petition of the respondent under Section 9 of the Act has been allowed and the appellant No.1 has been restrained from withholding with it the monies claimed by the respondent herein, the petitioner in the Court below, under the subject contract as also other contracts. Both these appeals involve similar issues and are based on similar facts and are therefore being disposed of by this common judgment. For the sake of convenience, reference is made to the facts of FAO No.189/2011.
(2.)The facts of the case are that the respondent herein was awarded the contract, being contract No.620/09, being one of eight contracts for erection, testing, commissioning and trial operation of a Turbine Generator set with auxiliary and piping at District Jhansi, UP dated 3.10.2009. The case of the respondent in the petition filed under Section 9 of the Act was that it had completed almost 57% of the work within 10 months against total time allowed of 18 months in spite of which the contract was being terminated without any fault on the part of the respondent. It was alleged that termination notice dated 14.5.2010 issued by the appellant No.1 herein was illegal and fabricated. The respondent claims to have replied to the legal notice seeking reconsideration of the termination notice to which there was no response, whereupon the arbitration clause No.33 in the contract was invoked by the respondent vide its letter dated 9.6.2010. The appellant no.1 herein, and respondent no.1 before the Court below, submitted in the reply to the Section 9 petition that respondent herein was a defaulting contractor who failed to perform his obligation under the contract. It was the stand of the appellants that they were forced to terminate the contract because in spite of repeated notices, the respondent did not improve its work at site. On account of the breach of contract committed by the respondent, its contract was terminated and the contract was awarded to M/s. Vasavi Power Services Pvt. Ltd. on 11.6.2010 at the risk and cost of the respondent herein in terms of clause 25 of the general conditions of the contract. It was further the case of the appellant that the contract in question is in respect of a project of national importance which was time bound and that the correspondence between the parties would show that the same had to be terminated on account of defaults and breaches on the part of the respondent herein.
(3.)By the impugned orders, the appellant No.1 herein, and the respondent in the Court below, has been restrained from withholding the monies which are claimed by the contractor under the subject contract and also under other contracts. The only issue which is therefore required to be examined in these appeals is whether the impugned orders are correct when they restrain the appellant No.1 from withholding the monies which are claimed by the respondent herein under the subject contract No.620 of 2009 and also the other contracts. To complete the narration it is stated that the respondent herein had claimed various other reliefs in its petition under Section 9 of the Act, and though which were declined by the impugned order, yet there is no appeal filed by the respondent herein against the impugned orders for the reliefs declined.