The High Court directed the recovery letter to be kept in abeyance pending the outcome of ongoing arbitral proceedings. The court held that recovery proceedings cannot run concurrently with arbitration.
Impugned recovery letter kept in abeyance pending determination of arbitral proceedings.
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Court No. - 2
Case :- WRIT - C No. - 7664 of 2022
Petitioner :- M/S Sri Ram Cables Pvt. Ltd Respondent :- Union Mof India And 2 Others Counsel for Petitioner :- K.S. Ojha,Sr. Advocate Counsel for Respondent :- A.S.G.I.
Hon'ble Dr. Kaushal Jayendra Thaker,J. Hon'ble Ajai Tyagi,J.
Heard learned counsel for the petitioner.
The petitioner has prayed for the following reliefs:
"It is, therefore, most respectfully prayed that this Hon'ble Court may kindly be pleased to allow this petition and quash the impugned recovery letter dated 14.1.2022 of Rs.1,52,62,093.40 issued by the respondent No.2 (annexure No.5) till disposal of arbitral proceedings in the matter of contract no. CORE/S/1111/5566/20483 dated 7.5.2018 for supply of copper catenary wires and/or pass such other and further order as this Hon'ble Court amy deem fit and proper under the facts and circumstances of the case."
Even without going into the merits of the matter, a practical view can be found out, namely, the dispute can be sorted out by staying the impugned recovery pursuant to the recovery letter dated 14.1.2022 issued by respondent No.2 as there are arbitral proceedings as far as contract is concerned.
We opined to the parties that as the respondents-Union of India more particularly, Central Organization for Railway Electrification (respondents 2 and 3) that this Court is of the opinion that once arbitral proceedings are going on, recovery letter should not have been issued and if it is issued, it should not have been executed till the lis is decided as arbitral proceedings and recovery proceedings cannot go simultaneously.
The prayer required to be granted even on the fact that arbitral proceedings, which are pending, could not have been so short-circuited by seeking recovery.
We are not quashing the impugned recovery letter, but directing to keep the same in abeyance till the lis is not decided between the parties.
Arbitral authorities should decide the matter within four months from today.
The petition is partly allowed .
Shri Udit Chandra, learned Advocate, is present on behalf of respondents.
Order Date :- 13.5.2022 LN T
Digitally signed by LALIT TRIPATHI Date: 2022.05.17 17:09:21 IST Reason: Location: High Court of Judicature at Allahabad
2 issues framed by the court
Whether recovery proceedings can proceed simultaneously with pending arbitral proceedings.
Whether the impugned recovery letter should be quashed or kept in abeyance.
1 provisions across 1 enactments
M/S Sri Ram Cables Pvt. Ltd
Union of India
Central Organization for Railway Electrification
Kaushal Jayendra Thaker
Ajai Tyagi
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
