BHAGAWATI OXYGEN LTD Vs. HINDUSTAN COPPER LTD

JUDGEMENT

(1.) Leave granted.

(2.) All these appeals arise out of common judgment and order passed by the Division Bench of the High Court of Calcutta in APOT Nos.721 of 2002 and 736 of 2002 on July 03, 2003 by which the Division Bench confirmed the order passed by learned single Judge on July 24, 2002 in A.P. No.369 of 2002. That A.P. was filed by Hindustan Copper Limited against Arbitration award passed by Justice L.M. Ghosh (Retd.) on September 25, 2000, under the Arbitration Act, 1940 (hereinafter referred to as the Act).

(3.) To appreciate the controversy raised in the present appeals, relevant facts may be stated in brief. On March 10, 1988, Hindustan Copper Limited (HCL for short) invited tender for supply of oxygen for its plant at Ghatsila. The tender contained a condition that successful bidder will set up an oxygen plant in the vicinity of HCL. the tender of Bhagwati Oxygen Limited (BOL for short) was accepted and an agreement had been entered into between HCL and BOL on March 17/April 14, 1990. It was for a period of seven years from the date of commencement of supply of oxygen. The agreement stated that the supplier i.e. BOL will at its own cost install, operate and maintain an oxygen plant of 25 TPD capacity of pressure vacuum swing absorption type with suitable compressors for supply of high purity oxygen gas to HCL. It also stated that the purity of oxygen would be 99 per cent. The agreement further stated : "The oxygen plant should have the capacity to supply not less than 1,25,000 mms of gas of 99 per cent purity per week on a sustained basis as and when required by HCL". Clause 2.3 clarified that the minimum acceptable purity of the oxygen gas should be 85 per cent for both flash furnace and converter. Meter readings for invoicing billing purpose were to be taken jointly by authorized representatives of HCL and BOL as and when the plant stopped/started. Provision was also made for periodical checking and calibration of meters. It was the duty of BOL to erect plant and pipe line system. A right to inspection and review was conferred upon HCL. Requirement of gas and supply thereof had been mentioned in Clause 2.1. Water supply required for the plant was to be arranged by BOL at its own cost but HCL agreed to supply water for operation of the plant. BOL had undertaken to erect and commission the plant and start supply of gas continuously to HCL within 18 months from the date of receipt of order or letter of intent whichever was earlier and the gas was to be made available to HCL in the requisite quality and quantity as per conditions agreed upon. Provisions had also been made with regard to price of gas and minimum off-take guaranteed. Time was the essence of the contract and penalty had been provided for in case of breach of contract. Clauses 10.4 and 10.5 are relevant and they read as under:-