Nafr High Court
Case Details
1 MANPREET KAUR Digitally signed by MANPREET KAUR Date: 2025.09.26 10:31:47 +0530 2025:CGHC:49131-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 5139 of 2025 M/s Moon Caterers Through Its Proprietor, Mohammad Shoaib, S/o Rafik Mohammad, Aged 36 Years, R/o 8/8, Bristol Chowk, Chhotapara, District Raipur (C.G.) ... Petitioner versus 1 - State of Chhattisgarh Through Its Secretary Department of Urban Administration And Development, Mantralaya, Mahanadi Bhawan, Nawa Raipur, Atal Nagar, District- Raipur (C.G.) 2 - Raipur Smart City Limited Through Its Managing Director, Chhatrapati Shivajee Maharaj Outdoor Stadium, Near Vivekanand Sarovar, Raipur, Distt.- Raipur (C.G.) 3 - The Collector District Raipur (C.G.) 4 - The Municipal Corporation, Raipur Through Its Commissioner, White House, Near Gandhi Chowk, Raipur, District Raipur (C.G.) (Cause-title taken from Case Information System) ... Respondents For Petitioner : Mr. Rajesh Kumar Kesharwani, Advocate For Respondent-State
Legal Reasoning
: Mr. Shashank Thakur, Deputy Advocate General For Respondent No.4 : Mr. Pankaj Agrawal, Advocate Hon'ble Shri Hon'ble Ramesh Sinha, Chief Justice Shri Bibhu Datta Guru, Judge Per Ramesh Sinha , Chief Justice
Decision
Order on Board 25.09.2025 1. Heard Mr. Rajesh Kumar Kesharwani, learned counsel for the petitioner. Also heard Mr. Shashank Thakur, learned Deputy 2 Advocate General, appearing on behalf of the State/respondents No.1 and 3 as well as Mr. Pankaj Agrawal, learned counsel appearing for respondent No.4. 2. The present petition has been filed by the petitioner with the following relief(s):- “10.1. The Hon'ble Court may kindly be pleased to call for entire records of the matter in hand. 10.2. The Hon'ble Court may kindly be pleased to issue appropriate writ/writs, direction/directions, order/orders to quash/set aside the impugned recovery order dt. 18/08/2023 (Ann. P/1) in the ends of justice. 10.3. The Hon'ble Court may kindly be pleased to direct the respondents to let the petitioner perform their duties according to clause 6.2.5 of the License Agreement till delivery of arbitration award. 10.4. The Hon'ble Court may kindly be pleased to direct the respondents for payment of amount of Rs. 80.50 Lacs after adjustment of the recoverable amounts. 10.5. The Hon'ble Court may kindly be pleased to direct the respondents for payment of interest @ 12% p. a. along with the compensation for the loss incurred between period of cancellation of tender and initiation of arbitration i.e. for 02 years. 10.6. Any other relief, which the Hon'ble Court deems fit looking to the facts and circumstances of the case, may also be granted to the petitioner.” 3. Learned counsel appearing for the petitioner submits that the petitioner is a duly registered service-providing agency which had 3 successfully participated in the tender process initiated by respondent No.2 for “Design, Development, Implementation, Operation and Maintenance of Smart Parking Management” at the Multi-Level Car Parking (MLCP), situated at EAC Colony, Raipur, on annual license fee basis for an initial period of five years, extendable by another five years. Pursuant to the petitioner emerging as a successful bidder, a License Agreement was duly executed between the petitioner and respondent No.2. However, the said agreement has been arbitrarily and unlawfully cancelled by respondent No.2, who has further proceeded to issue a wholly unjustified recovery order of Rs.22,39,903/-. 4. It is contended that the respondents, in complete disregard of the terms and conditions of the License Agreement, have terminated the contract only to escape their own liability towards arrears payable to the petitioner. Notably, despite the fact that large numbers of two-wheelers and four-wheelers were parked in the MLCP without payment of any fee, no reimbursement whatsoever was made to the petitioner. Further, learned counsel submits that the license agreement was originally executed for operation of seven floors of the MLCP, but the respondents, acting beyond their contractual rights, have started operating a BPO centre in the 5th and 6th floors of the said MLCP, thereby frustrating the very purpose of the agreement. Despite repeated representations and requests made by the petitioner for release of its legitimate 4 dues, the respondents, instead of honouring their contractual obligations, have issued the impugned recovery order and terminated the agreement, in contravention of Clause 6.2.5 of the License Agreement, which clearly provides that the obligations of the parties subsist till the award of arbitration. It is further submitted that although the agreement stipulates resolution of disputes through arbitration, no arbitrator has been appointed till date by respondent No.01, despite repeated demands for initiation of the process of Alternate Dispute Resolution. In these circumstances, the petitioner prays for issuance of appropriate directions to the respondents to make payment of the undisputed parking fee of Rs.80.50 lakhs, along with applicable interest for the delay, as well as reimbursements lawfully due, besides enforcing Clause 6.2.5 of the License Agreement in letter and spirit. 5. Learned counsel for the petitioner also argued that the petitioner had approached this Court challenging the tender cancellation order in WPC No. 3531/2023, with the specific intention of seeking the remedy of arbitration, as evidenced by the order dated 09/08/2023. It was submitted that the license agreement, under Clause 6.2, expressly provides for arbitration as the agreed mechanism for resolving disputes, in accordance with the provisions of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act, 1996”). Counsel emphasized that Section 5 29A of the Act, 1996 mandates that arbitral proceedings be concluded within a period of twelve months, thereby ensuring a speedy and effective resolution of disputes. It was highlighted that, despite this statutory requirement and the Court’s earlier directions, respondent No. 2 has failed to appoint an arbitrator. The petitioner has made multiple representations to the respondents requesting the initiation and appointment of an arbitrator, but no action has been taken in response. Copies of these representations dated 23/08/2023, 14/09/2024, and 11/03/2025 have also been annexed with the petition, reflecting the petitioner’s persistent efforts to invoke the arbitration process, which have been entirely ignored by the respondents. 6. On the other hand, Learned counsel for the State and respondent No.4 submit that the petitioner defaulted in complying with the License Agreement, leading to lawful termination and recovery proceedings. The alleged claim of Rs. 80.50 lakhs is baseless and disputed, as no such reimbursement is admissible under the contract. The issue is purely contractual, and since the agreement contains an arbitration clause, the petition is not maintainable. 7. We have heard learned counsel appearing for the parties and perused the documents annexed with the writ petition. 8. Clause 6.2 deals with Arbitration and particularly Clause 6.2.5 deals with performance during Arbitration, which reads as under 6 for easy reference :- “Pending the submission of and / or decision on a dispute and until the arbitral award is published; the Parties shall continue to perform their respective obligations under this Agreement, without prejudice to a final adjustment in accordance with such award.” 9. From a perusal of Clause 6.2.5, it is quite clear that even during the pendency of any dispute or arbitration proceedings, both parties are bound to continue with their respective obligations under the License Agreement. Thus, unilateral termination of the agreement and issuance of the impugned recovery order by the respondents is not only arbitrary but also in direct violation of the contractual mandate. 10. Having considered the rival submissions and on perusal of the material on record, it is evident that the entire controversy raised by the petitioner pertains to alleged non-payment of dues and arbitrary termination of the License Agreement executed between the parties. The reliefs sought are essentially for enforcement of contractual rights and recovery of monetary claims. 11. It is not in dispute that the License Agreement contains an arbitration clause, and Clause 6.2.5 specifically obligates both parties to continue to perform their respective obligations until an arbitral award is rendered. In such circumstances, once the parties have consciously bound themselves to an agreed 7 mechanism of dispute resolution, namely “Arbitration”, this Court, while exercising powers under Article 226 of the Constitution of India, would not ordinarily interfere in matters which involve disputed questions of fact and interpretation of contractual terms. 12. The law is well-settled that writ jurisdiction is not an appropriate forum to adjudicate contractual disputes where an efficacious alternative remedy exists. The petitioner is free to invoke the arbitration clause and seek appointment of an Arbitrator, as contemplated under the agreement, for adjudication of its claims. 13. Accordingly, the writ petition, being not maintainable in view of the arbitration clause and the availability of an alternate statutory remedy, is dismissed. However, if the petitioner had approached the respondents for invoking the arbitration clause as has been stated through various representations, but if the same has not been acted upon by them, the petitioner is at liberty to take recourse to law accordingly. Sd/- Sd/- (Bibhu Datta Guru) Judge (Ramesh Sinha) Chief Justice Manpreet