Ekta Shakti Foundation v. Government of National Capital Territory of Delhi

1. This appeal under Section 37 of the AiEitration and Conciliation Act, 1996('Act')is directed against an order dated 12^^ January 2015 passed by the sole Arbitrator declining to grant interim reliefin an application filed by the Appellant under Section 17 ofthe Act.

2. A contract had been entered into between the Appellant and the Government ofNational Capital Territory ofDelhi(GNCTD)on IS'*" March ARB.A.No.13of2015 p^ge] of[4] 2015:DHC:11788 ■'?5 th 2013 for supply of mid-day meals to 40 schools. A work order dated 19 March 2013 was issuedpursuant to the said contract.

3. By a subsequent order dated 29'^ October 2013, the Respondent cancelled the contract.

4. Aggrievedby the said cancellation, the Appellant first filed Writ Petition

(C) No. 8189 of 2013 during the hearing of which the Appellant sought to withdraw the said petition with liberty to initiate arbitration proceedings in terms of Clause 33 of the contract. The writ petition was then dismissed as withdrawn.

5. Before the learned sole Arbitrator, the Appellant filed an application under Section 17 of the Act seeking an interim stay of the cancellation order dated 29^*" October 2013.By the impugned order dated January 2015 the learned Arbitrator formed the opinion that the questions raised in the application were mixed questions of fact and law. The learned Arbitrator observed that the said questions are kept open and will be considered at the time of final adjudication after recording of evidence of the parties. The ARB.A. No. 13 of2015 Page[2] of[4] L\ r application was accordingly disposed of.

6. This Court has heard the submissions of Mr. N.N. Aggarwal, learned counsel,appearing for the Appellant and Mr.D.P.Kaushik,learned counsel for the Respondent GNCTD.

7. The Courtis ofthe considered view thatthe interim reliefbeing soughtby the Appellant was not capable ofbeing granted by the sole Arbitrator in an application under Section 17ofthe Act. In other words,there could notbe a stay ofthe operation ofan order passed bythe RespondentNo.1 terminating the contract. Even if the Appellant ultimately establishes after evidence is led thatthe termination was illegal,the remedy ofthe Appellant was to seek damages for such illegaltermination. By an interim order,there cannot be a stay ofthe termination ofthe contract.

8. Consequently,no interference is called for with the impugned order ofthe learned Arbitrator. It is clarified that all the contentions ofthe Appellant as regards the validity ofthe order oftermination ofcontract, are left open for decision in the arbitral proceedings. ARB.A.No.13of2015 Page3of[4]

9. The appeal is accordingly dismissed.