SMS LTD. Vs. RAIL VIKAS NIGAM LIMITED

JUDGEMENT

(1.) The present petition has been filed by the petitioner under Section 11(6) read with Section 11(12)(b) of the Arbitration and Conciliation Act, 1996 (in short, 'Act of 1996') with the following prayers:

(2.) It is the case of the petitioner that it was incorporated in 1997 at Nagpur and is one of the leading infrastructure companies in Central India. The respondent Company is the Rail Vikas Nigam Limited (RVNL), which is a 100% owned PSU of Ministry of Railways, was incorporated on January 24, 2003 with the objective of raising extra budgetary resources and implementing projects relating to creation and augmentation of capacity of rail infrastructure on fast-track basis.

(3.) The respondent Company in March, 2009, invited tenders from eligible bidders for "Construction of Roadbed, Supply of Ballast Major and Minor Bridges, Residential and Service Buildings and General Electrical Work etc. for Dallirajhara- Keoti Section in connection with a new rail link between Dallirajhara and Rowghat in Raipur Division of South East Central Railway in the State of Chhattisgarh, India at an estimated cost of Rs.115.62 Crores with completion period of 24 months along with 6 months defect liability period. The petitioner Company submitted its bid dated June 16, 2009 to the respondent Company. The respondent Company after evaluation of the same accepted the petitioner Company's bid vide its letter dated October 20, 2009 which was to be treated as the Letter of Acceptance (LoA). By way of the said LoA the respondent Company called upon the petitioner Company to submit Performance Security. The petitioner Company on receipt of the LoA duly submitted the "performance security" and the "additional performance security". The respondent Company thereafter issued another letter dated November 30, 2009 in accordance whereof the work was to be commenced by December 10, 2009. Subsequently, the Contract Agreement dated May 27, 2010 ('Contract Agreement', for short) was executed between the petitioner Company and the respondent Company. Further, as per the Contract Agreement, the work was to be completed by December 09, 2011 which excludes six months as defect liability period.