STATE OF CHHATTISGARH Vs. ANJANI STEELS LIMITED

JUDGEMENT

(1.) This arbitration appeal has been preferred against the impugned order dtd. 18/10/2019 passed by the Commercial Court (District Level), Raipur in M.J.C. No. 44/2018, whereby the award dtd. 09/09/2018 passed by Hon'ble Shri Justice L.C. Bhadoo (Retd.), Sole Arbitrator, in the matter of M/s Anjani Steels Ltd. vs. State of Chhattisgarh & Ors., was upheld.

(2.) (i) For establishing a Steel and Power Plant in the State of Chhattisgarh, the respondent, M/s Anjani Steel Limited, entered into a Memorandum of Understanding (MoU) with the State of Chhattisgarh in 2003, proposing to invest Rs.185.00 crores in the State for setting up the aforesaid plants. Subsequently, in 2007, a second updated MoU was executed between the parties with a proposal to invest Rs.410.00 crores in the State. Pursuant to the aforesaid MoUs, the respondent company set up a Sponge Iron Plant and a 12 MW Power Plant in Ujalpur, District Raigarh, Chhattisgarh. The respondent was also in the process of expanding its unit by establishing a 60 MW Power Plant. Since the respondent company required a large quantity of water for its plants, it moved an application on 10/9/2007 before the appellant's department, seeking allotment of 33.3 Cu. Mtr./Hour of water. As the Government did not take any action on the said application, the respondent company again filed a second application on 12/6/2009 before the appellant's department, referring to its earlier pending application, and further informed that its present water requirement was 0.29 Million Cu. Mtr./Year. It was also stated that the requirement would increase once the 60 MW Power Plant expansion became operational. The appellants/State accepted the respondent's proposal and agreed to meet the requirement of 0.29 Million Cu. Mtr./Year as well as the additional requirement of 1.52 Million Cu. Mtr./Year in the future for the 60 MW Power Plant and the integrated Steel Plant, after construction of the Kelo Dam on the Kelo River.

(3.) (A) Learned Advocate General appearing for the State would submit that the impugned order as well as the Arbitral Award are contrary to the terms and conditions enumerated in the Agreement dtd. 11/12/2009 and hence, the same is illegal and bad in eyes of law. He further submitted that the Agreement was executed between the parties for the allotment of water i.e. 1.81 MCM/Year. The respondent had entered into the subject agreement with appellants with eyes wide open and terms & conditions mentioned in the agreement were mutually agreed by the parties and in accordance thereof the monthly bills were raised by the appellants department.