TGV SRAAC LTD. Vs. UNICON ENGINEERS

JUDGEMENT

(1.) The petitioner has assailed the Award passed by the sole Arbitrator dtd. 2/11/2021 in the present petition filed under Sec. 34 (2) of the Arbitration and Conciliation Act, 1996, (for brevity, hereinafter referred to "the Act").

(2.) The case of the respondent/claimant is that they are a small enterprise registered in the year 1991 under the Micro, Small and Medium Enterprises Development Act, 2006, (hereinafter referred to as "the MSMED Act") and that they are engaged in the manufacture of air pollution control equipments. The petitioner proposed to install a captive thermal power Plant of 25 MW capacity for the purpose of supplying energy to its manufacturing units. This power plant required pollution control equipment and, for that purpose, the petitioner negotiated with the respondent and issued a Letter of Intent (LOI) dtd. 12/3/2009 containing various terms and conditions for the design, engineering, manufacture, supply, storage, erection and commissioning of Elector Static Precipitator (hereinafter referred to as "ESP"). The contract price was fixed at Rs.3,95,00,000.00.

(3.) The further case of the respondent is that they supplied the ESP machinery at a price of Rs.3,75,00,000.00 upon various payment terms. In the purchase order, it was stated that a separate work order will be issued later for erection and commissioning at a cost of Rs.20,00,0000.00. Subsequently, the purchase order was amended vide letter dtd. 22/5/2009, whereby the cost of supply was revised to Rs.3,55,00,000.00 and the cost of erection and commissioning was revised to Rs.40,00,000.00.