Case Law Details
Union of India Vs Delhi State Consumer Co Operative Federation Ltd. (Delhi High Court)
Facts- According to Union of India, Delhi State Consumers Co-operative Federation Limited (respondent) failed to furnish the requisite security deposit, as a result of which each of the contracts were cancelled at the risk and cost of the respondent. The Union sought to claim consequential damages.
On 05.09.2016, the Union received legal notices from DSCCFL for reference of the matters to arbitration. After various actions at both the end, before any further progress could be made in the matter, the Arbitrator terminated the proceedings by the impugned order.
Conclusion- As noted above, in Awasthi Construction also, this Court noticed the availability of the remedy for recall of an order terminating the proceedings under Section 25(a) of the Act before the Arbitrator himself. On this issue, the view taken by this Court in Awasthi Construction and ATV Projects India Ltd. vs. Indian Oil Corporation Ltd. & Anr., as well as by the Patna High Court in Senbo Engineering have been expressly endorsed by the Supreme Court in Srei Infrastructure. A reading of Srei Infrastructure as a whole, therefore, leads to an inescapable conclusion that an order terminating proceedings under Section 25(a) of the Act can be recalled by the Arbitral Tribunal on the application of the claimant, and that the interference of the writ court is justified where the Tribunal has failed to interfere. The judgment in Awasthi Construction must be read in this context.
In view of the aforesaid, the writ petitions are partly allowed. The Arbitrator is directed to consider the applications presented by the Union for recall of the orders dated 19.02.2021 terminating the arbitral proceedings under Section 25(a) of the Act. As the proceedings have been unduly prolonged, the Arbitrator is directed to dispose of the applications after hearing the parties, within three months from today. It is made clear that this Court has not made any comment on the merits of the said applications.
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