HIMCON PROJECT PVT LTD Vs. LMZ ENERGY LIMITED

JUDGEMENT

(1.) Appellant Himcon Projects Private Limited has preferred the instant appeal against the impugned order dated 30-6-2010 passed by the District Judge, Bilaspur in M. J. C. No. 155/ 2009, whereby the application moved by the appellant under Section 9 of the Arbitration and Conciliation Act, 1996 (henceforth 'the Act, 1996') seeking an interim protection has been dismissed.

(2.) Facts of the case, as projected by the appellant, in brief, are that the appellant is a reputed business company dealing in civil and other construction works. Its registered office is situated at Bilaspur. Respondent No. 1 is a company having its registered office at New Delhi and managed by its Managing Director and respondent No. 2, the Engineer-in-Chief is Officer-in-'Charge of the respondent No. 1/company. A tender was invited by the respondents for construction of a guest house at Seepat Road in Bilaspur. Total value of contract for construction of the guest house was worth Rs. 4,80,6,890.00 and entitlement of remuneration for the work was in accordance with the rates indicated in the document (Annexure P-2). The appellant got the contract and entered into an agreement with the respondent for construction of the guest house. After the agreement, construction was started by the appellant. The appellant mobilized his staff and machines at the site for construction of the guest house. As per the terms and conditions of the agreement, the appellant was entitled for a free mobilization advance equal to 10% of the contract value against bank gurantee of an equal amount from any scheduled bank on the Proforma acceptable to respondent No. 1/ company and stage-wise payment of the work as per the document (Annexure P-3). The appellant executed the work at the site with quality as per the instructions of the respondents and utmost efforts were made to complete the guest house as early as possible. The term of the agreement regarding stage-wise payment of the work done has not been fulfilled by the respondents. The appellant has submitted bills for payment with respect to the work done. Several letters were sent by the appellant to the respondents regarding the payments on 15-4-2008 (Annexure P-4), 2-6-2008 (Annexure P-5) and 14-8-2008 (Annexure P-6), but the respondents did not turn-up and neither bother to reply a single letter nor gave any indication for releasing any payment. The appellant sent E-mail to the respondents, requested them tele-phdnically and visited them at their offices in preson, but all the efforts became futile. The respondents are not responding to the appellant properly. This attitude of the respondents was causing heavy financial loss to the appellant and, therefore, the appellant was 'finding it difficult to continue the work of construction of the guest house. The appellant had completed about 90% of the work andwas/is maintaining the constructed guest house. Despite that, the respondents are not responding in regard to release of payment of the work done. The amount falls due for payment is Rs. 85,34,534.00 along with the building maintenance charges approximately Rs. 5p,000/- per month, which is still pending with the respondents. Payment of the electricity charges is also pending with the respondents. Since the respondents did not make the payments even after several efforts, the appellant sent a legal notice dated 23-10-2008 (Annexure P-7) to respondent No, 2/ the Engineer-in-Chief, wherein the appellant made demand of the payment of Rs. 85,34,534.00 along with interest @ 24% on the said amount within 7 days. The respondents replied the legal notice after expiry of 7 days, i.e., on 12-12-2008 (Annexure P-9) and denied all the contentions of the legal notice. The appellant got an information that the respondents were preparing to hand over possession of the constructed guest house to other person or company, which may cause it irreparable loss, therefore, it preferred an application under Section 9 of the Act, 1996 before the learned District Judge, Bilaspur.

(3.) The District Judge, holding that the balance of convenience and irreparable loss, in the facts of the case, did not seem to be in favour of the appellant for the simple reason that the appellant itself failed to follow the terms of the agreement, dismissed its application under Section 9 of the Act, 1996.