1. The applicant/petitioner has approached this Court under Section 9 of the Arbitration and Conciliation Act, 1996 with a prayer that the Court should issue an interim injunction restraining the respondents from terminating the contract awarded to the applicant/petitioner and should also give directions to the respondents not to invoke the Performance Bank Guarantee, Machinery Advance Guarantee and Mobilization Advance Guarantee furnished by the applicant and restraining respondents from taking any other coercive or adverse steps of towards the applicant.
2. The facts relevant for the purpose of deciding the present application are that the applicant had entered into a contract with the respondent for ‘4-laning’ of National Highway No. 28 between Gorakhpur and Gopalganj from km 360.915 to km 402.00 Thus, the length of construction of ‘4 laning’ awarded to the petitioner measured 41.085 kms. The initial contract was entered into between parties on 20.10.2005 The last date for completion of the 4-laning work was November, 2008. The work was not completed within the stipulated period and the petitioner/applicant made representation to the respondent not to cancel the contract and to grant extension of the time for completion of the work. A supplementary agreement dated 27.11.2008 was executed between the parties and in the supplementary agreement, the applicant/petitioner had undertaken to do a specific percentage of work each month starting from December, 2008 to May, 2009. The agreed percentage is as under:
The contract hereby undertakes that it shall expedite the progress of works and shall achieve the minimum monthly progress of works as stated below:
(a) December, 08—2%,
(b) January, 09—3%,
(c) February, 09—3%,
(d) March, 09—3.5%,
(e) April, 09—3.5%,
(f) May, 09—4%.
3. Clause 3 of this agreement provides that in case the contractor failed to achieve the required minimum progress as stated above in any of the calendar month, the respondent shall have absolute right (without being required to give a notice to contractor) to terminate the contract and enter upon the site. Exception was made in case of force majeure conditions. It was also stated that the contractor shall not be entitled to adjust any shortfall in the stipulated minimum progress of work in a particular month as provided in para above to the subsequent month(s) or any other month. Clause 5 of the agreement provided as under:
The Contractor hereby undertakes that it shall maintain sufficient staff, labour and equipment for effective progress of works. The Contractor further undertakes that it shall have available at site the aggregates and other construction materials sufficient for next 15 days of work, required for achieving the above minimum progress of works.
4. The facts reveal that during month of December itself, the applicant was not able to achieve the target of 2% of the work progress, the progress made was 1.337%. Letter dated 5.1.2009 written by the applicant to the respondent gave the reasons as to why this progress could not be achieved and the main reason given was extreme climatic condition prevalent during December, 2008.
5. Respondent issued a show-cause notice dated 19.1.2009 to the applicant/petitioner as to why action should not be taken under the terms of supplementary agreement read with the original contract and why the contract be not terminated. Under these circumstances, the petitioner approached this Court.
6. This Court under Section 9 of the Arbitration and Conciliation Act cannot give direction to a party of not terminating the contract or to continue with the contract. If the contract is terminated, the applicant/petitioner shall have rights as available to him under law. It is the right of a party not to continue with a contract and the Court cannot force a contract on somebody under Section 9 of Arbitration and Conciliation Act.
7. The Counsel for the applicant in fact pressed for second relief that the respondent should be restrained from invoking Bank Guarantees. He submitted that though the law regarding Bank Guarantee was quite stringent but the Courts have carved out exceptions where the Court can interfere and can restrain respondent from invoking Bank Guarantees. He submitted that the Court can interfere (1) If there is a fraud in connection with the Bank Guarantee which would vitiate the very foundation of such Bank Guarantee, (2) the circumstances of the case, clearly establishes a case of irretrievable injury or irreparable damage and, (3) the applicant was able to establish exceptional or special equities of the kind which would prick the judicial conscience of the Court. He argued that the case of the applicant was covered by the third exception. The contention is that the opinion of the engineer appointed by the respondent was having considerable weightage in the contract and in this case engineer had recommended that the slippage in the progress occurred due to ‘adverse climatic condition, which affected the progress of bituminous work. He recommended that instead of terminating the contract a further undertaking should be taken from the contractor since the contractor had augmented his resources during the month of December, 2008. In view of the engineer's report, the respondent should not have taken the step of issuing show-cause notice and going to the extent of threatening termination and consequential invoking of bank guarantees.
8. I consider that the case of the applicant/petitioner does not fall under any of the exceptions carved out by the Courts in respect of issuing injunctions regarding invocation of Bank Guarantee. The supplementary agreement was entered into between the parties on 27.11.2008 itself. The coming months ??? winter months and it was well known to the contractor that winter months do some time have extreme conditions and fog can be there, visibility condition due to fog may also deteriorate. The weather conditions of December and January are normally predicable and are almost similar every year except that in some year fog is there for more number of days and in some years it may be for less number of days. The weather conditions so predicable do not fall under the category of force majeure. Every contractor, who enters into a contract in India, knows that in India there are extreme weather conditions in some parts of the year. He cannot take shelter of these extreme weather conditions and say that in summer the temperature shot up upto 48 degree Celsius on some days of work and it hampered the progress of the work and during winter the temperature fell down below 14 degree Celsius or 15 degree Celsius and hampered the work. If these weather conditions has to be made a ground for slow progress of the work, this should have been mentioned in the contract but while entering into contract the petitioner did not mention these weather conditions as part of the contract and did not state that his progress in the work shall depend upon the weather conditions. I, therefore, consider that it is not a case of force majeure or a case of exceptional circumstances where the Court should intervene. The Court cannot re-write a contract for the parties. It is the parties, who have to be careful while entering into contract. The parties can only come for enforcement of the contract entered into between them and cannot ask the Court to change the terms and conditions of the contract or to infer those terms and conditions in the contract which are not there explicitly.
9. The applicant, who had not completed work during the stipulated time limit as stated in the initial contract, was at liberty to walk out of the contract if it was not possible for him to maintain this progress rate due to extreme weather conditions. Once he had not chosen not to walk out and had entered into supplementary contract, he now cannot take shelter of extreme weather conditions for non-performance or under performance. Moreover, it was obligatory on the contractor under the supplementary agreement, to have, on the site, enough material and human resources to ensure the minimum progress rate as agreed by him. Vide Clause 5 of the supplementary agreement he had undertaken to keep at site aggregates and other construction material sufficient for next 15 days of work so as to achieve agreed minimum progress rate. Excuses for not doing the work can be many unless the excuses form part of the contract, the Court cannot entertain such excuses. I consider that the case of the petitioner/applicant does not fall within the scope of the judgment referred by him titled as Hindustan Construction Co. Ltd. v. Satluj Jal Vidyut Nigam Ltd., 2006 (1) AD (Delhi) 466. I find no ground to entertain the application/petition. The petition is hereby dismissed.
Petition dismissed.