GAIL INDIA LIMITED Vs. SURYA ROSHINI LIMITED

JUDGEMENT

(1.) A Contract was executed between the petitioner and National Thermal Power Corporation ( for short, "NTPC" ) in terms whereof the petitioner agreed to supply gas to NTPC for its power plant at Village Mujheri, Tehsil Ballabhgarh, District Faridabad, w.e.f. 01.05.1999." In furtherance of the contract, the petitioner provided a tap off at Village Chainsa in its main gas pipe line running from Bijapur to Dadri." A fourteen km. long Spur pipeline of 14 inches diameter from tap off point at Village Chainsa to the power plant of NTPC at Faridabad was also required to be laid." The petitioner, thus, floated a global tender through its consultants on 11.04.1998 for procuring the line-pipes of two descriptions.

(2.) The respondent is engaged in the business of production of electric welded pipes and tendered its bid document to the petitioner, which was accepted by the petitioner." This resulted in a purchase order dated 12.08.1998 for supply of line-pipes, which was duly signed by the respondent in token of its acceptance on 20.08.1998." The purchase order was subsequently modified in terms of the clarification sought by the respondent, such clarification being issued by the petitioner vide letter dated 26.08.1998.

(3.) In furtherance of the contract, the line-pipes were supplied by the respondent to the petitioner and the same were laid and installed by the petitioner." It is the case of the petitioner that the pipes failed the Field Hydrostatic Test even before the requisite test pressure was reached and the petitioner resorted to alternative remedial measures for carrying out its operations under the contract with NTPC and incurred huge expenditure." On 01.03.2000, the petitioner sent a notice of demand, which was rebutted by the respondent vide its letter dated 14.03.2000." The respondent also claimed that, in any case, the liability to reimburse the petitioner for alleged failure of its pipes during the Field Hydrostatic Test was only to the extent of 10% of the contract value.